Introduction: Lord Finkelstein

Daniel William Finkelstein, Esquire, OBE, having been created Baron Finkelstein, of Pinner in the County of Middlesex, was introduced and took the oath, supported by Lord Owen and Lord Coe, and signed an undertaking to abide by the Code of Conduct.

Introduction: Baroness Humphreys

Christine Mary Humphreys, having been created Baroness Humphreys, of Llanrwst in the County of Conwy, was introduced and took the oath, supported by Lord Roberts of Llandudno and Baroness Randerson, and signed an undertaking to abide by the Code of Conduct.

Leveson Inquiry
	 — 
	Question

Lord Soley: To ask Her Majesty’s Government what progress they have made towards putting into effect the proposals made by Lord Justice Leveson in his report into the culture, practices and ethics of the British press.

Lord Gardiner of Kimble: My Lords, on 11 October, a final draft of the cross-party charter on self-regulation of the press was published following further discussions by the three main parties. These discussions helped to make the charter more workable. The cross-party charter will be on the agenda for a Privy Council meeting on 30 October.

Lord Soley: I thank the Minister for that reply. After the 20th anniversary of my Private Member’s Bill in the House of Commons, now reborn as Leveson, this is like travelling at the speed of light, although not everyone would agree with that. What do the Government propose to do if the newspapers decide not to co-operate with the new body? What talks have they had with the newspaper industry about that possibility?

Lord Gardiner of Kimble: My Lords, the first thing I will say is that the noble Lord is indeed a patient Lord. However, our purpose is to seek a voluntary process, and we very much hope that the press will,
	through its independent, self-regulatory body, apply to the recognition panel so that what has happened before does not happen again and we have the right mechanism in place. I emphasise that it is voluntary for the press to apply to the recognition panel. However, as your Lordships know, Parliament has—following through from the Leveson report—made very clear, through the Crime and Courts Act, what the position would be for those who transgressed.

Baroness Bonham-Carter of Yarnbury: Did the Minister see the Guardian/ICM poll last week, which demonstrated that the public are solidly behind external regulation of the press, underpinned by an outside body? Does he agree that the newspaper publishers should listen to the public, as well as to the victims and Parliament, and support the cross-party charter?

Lord Gardiner of Kimble: My Lords, I very much agree with my noble friend. In the end, we have a duty to the public and to the victims in particular. We have a responsibility to try to set in place a position where this does not happen again and which gives confidence to the public. I am aware of the polls—polls can do a range of things. I hope the press will see that the cross-party charter is designed because of good will and that we wish to protect the freedom of the press while ensuring that people have proper redress.

Lord Sugar: My Lords, throughout my business career I have always tried to view things through the eyes of the average man or the average consumer. With that in mind, the Leveson inquiry seems to have been a complete and utter waste of time. I see no change whatever in the attitude of the printed media, a view borne out by the recent behaviour of the Daily Mail—

Noble Lords: Question!

Lord Sugar: It is coming. The Daily Mail is a newspaper whose only true facts are the price and date on the front page. Does the Minister agree that Lord Justice Leveson should have recommended a proper regulator, the same as we have in the television industry? Self-regulation is not possible with the printed media.

Lord Gardiner of Kimble: My Lords, I do not think the noble Lord will be surprised if I say that Lord Justice Leveson did a very thorough job for the nation. There was great merit in what he was wrestling with because he was trying to balance the freedom of a responsible press—which we all cherish—with putting in place something that enshrines that but ensures that there is redress and gives confidence to the public. I am therefore afraid that I disagree with the spirit of what the noble Lord is suggesting.

Lord Inglewood: My Lords, regardless of one’s views about the merits or otherwise of any particular charter, does my noble friend not agree that the freedom of the press is a matter of the highest constitutional importance? Will he therefore consider an important request that this House be given the
	opportunity to debate the text of the charter that is now being finalised? Even if we cannot take part in the legislative aspects of it, there is a political aspect that ought to be debated on the Floor of the Chamber.

Lord Gardiner of Kimble: My Lords, I understand my noble friend’s position, particularly given that he chairs the Communications Committee. However, we have debated the cross-party charter and the Leveson report on many occasions, and I have been delighted to answer—or seek to answer—questions on them. I sense that the public are seeking some conclusion to this and that is why the cross-party charter is going before the Privy Council on 30 October. It is about trying to get some resolution so that we can move forward and set the structure in place.

Lord Grocott: Does the Minister detect something that I have not yet detected? The Leveson inquiry came about in the first place as a result of the most appalling treatment by the print media of individual innocent members of the public. It was that outrage that led to the inquiry. In the kind of almost academic exchanges that are going on, I get no sense at all that the leaders of the print industry share or understand that outrage. Can the Minister simply report to the House and reassure me that the Government feel the same sense of outrage that the overwhelming majority of the British people feel?

Lord Gardiner of Kimble: I sense from our exchanges in your Lordships’ House that there is a very strong feeling here which reflects what the nation feels. This is why the Prime Minister was absolutely right to start on the path of asking Lord Justice Leveson to look into these matters, because they should not have happened and responsible people could not possibly justify them. I say to those who are very senior in the press: I see no demons in what is proposed by the cross-party charter. This is about trying to have two very important things in our nation’s life: a responsible free press that can scrutinise and look at all that we and our institutions do, but will also safeguard the rights of the citizen.

Young People: Democratic Participation
	 — 
	Question

Lord Storey: To ask Her Majesty’s Government how they will ensure that young people acquire a practical understanding and awareness of how the United Kingdom is governed, its political systems, and how citizens may actively participate in its democratic systems of government.

Baroness Northover: My Lords, the new national curriculum for teaching from 2014 includes an improved programme of study for citizenship education at key stages 3 and 4. It is organised around core knowledge about democracy, government and how laws are made
	and upheld. Citizenship education seeks to equip students with the skills and knowledge to explore political and social issues, and to take their place in society as responsible citizens.

Lord Storey: I am grateful for my noble friend’s response. She may be aware that various youth democracy groups such as the British Youth Council, Operation Black Vote and Bite the Ballot are organising for next year’s National Voter Registration Day. How will the Government support and promote this initiative?

Baroness Northover: I thank my noble friend for his question. We are very supportive of that initiative. Citizenship education, too, should help to underpin students’ interest in how our democracy works.

Lord Kennedy of Southwark: My Lords, with individual electoral registration rapidly coming down the tracks, what are the Government going to do today to ensure that people as young as 14 and 15 understand that it will be their responsibility, not their parents’, to register to vote in less than two and a half years’ time?

Baroness Northover: I hope that the noble Lord has had a look at the curriculum for citizenship study. He will, I assume, know that that will be compulsory for the age groups 11 to 14 and 14 to 16. Within that, there will of course be an emphasis on students’ right to register and later to vote in elections.

Lord Geddes: Is my noble friend aware—I am sure that she is—of the Lord Speaker’s excellent outreach programme, in which I am very pleased to participate, whereby Members of your Lordships’ House go out to schools in order to give them the information pertaining to this question?

Baroness Northover: Yes, I am well aware of that and I know that a number of noble Lords have taken part. They report back that there is great enthusiasm for discussing politics today. It is notable that the number of students who are then voting in elections thereafter seems to increase.

The Earl of Clancarty: My Lords, would the Minister agree that one of the traditional ways in which young people get actively interested in political matters is through joining campaigning organisations, not necessarily party political ones, and that the Government should actively encourage and not hinder their operation, particularly in the period leading up to an election, when young people’s interest in political issues will be most easily stimulated?

Baroness Northover: Yes, I am well aware of the fact that young people often get involved in all sorts of campaigns. One of the things which comes through in citizenship education is how the links can be made between those sorts of issues and how you effect change through voting. For example, if young people are encouraged by Comic Relief to be concerned
	about the plight of children of their own age in another country, actually voting and trying to ensure that there is a commitment to international development is part of how they take that forward.

Lord Tomlinson: Does the noble Baroness agree that however good the curriculum is on citizenship, most young people will be singularly unimpressed by what they witness as the practice of government in Parliament? Yesterday’s Prime Minister’s questions in the House of Commons was a thorough disgrace, which most people who were watching will disapprove of, in which they saw a Prime Minister personally abusing the leader of the Opposition while trying to change policy half way through PMQs.

Baroness Northover: I am afraid that I did not see PMQs yesterday. However, when I go and listen in the Commons, I find myself grateful that I was never elected there—even though I tried several times—and that your Lordships’ House is a more tolerant place. There are more women in the House of Lords, and I think that also makes a difference.

Lord Tyler: My Lords, turning perhaps to safer territory, I return to the issue of the syllabus and the role of citizenship in it. Following concerns from all parts of the House, not least from my noble friend Lord Phillips and the noble Lord, Lord Roberts, on Thursday last week, is it not incredibly important to demonstrate to young people that this is not just theoretical, but that it leads on specifically to active citizenship? Is my noble friend aware that in Northern Ireland, where there was real concern about the transfer to individual electoral registration, it has become the habit in secondary schools to go right through the citizenship course with an end result of registration on the electoral register and for eventual voting?

Baroness Northover: Indeed, it has had a very positive effect in that regard. As I answered an earlier question, the link between what students will learn in their citizenship classes and their ability then to take that forward to register to vote and to vote is very important. I also note that within citizenship education students will be debating all sorts of political and social issues, and they will be encouraged to debate and make reasoned arguments and so on. I imagine that they are going to be very lively lessons.

Lord Hannay of Chiswick: My Lords, will the Minister and Secretary of State for Education accept my thanks for having acceded to the lobbying by a number of us to include the United Nations in the citizenship curriculum? Can she say whether the department and local authorities will welcome a non-governmental organisation like the United Nations Association, which promotes model UN debates up and down the country and can help the curriculum a good deal?

Baroness Northover: I thank the noble Lord and will pass on his tribute to my right honourable friend the Secretary of State. Indeed, looking at the curriculum,
	I was struck by how international it was. I am sure that the organisations that he referred to will be encouraged to play their part in trying to inform students; that would be extremely welcome. However, the curriculum reaches in all directions. Internationally, it deals with human rights and international law, and it also looks at the diverse national, regional, religious and ethnic identities within the United Kingdom. Therefore, it extends and it is deep.

Lord Campbell-Savours: My Lords, when the Minister says to the House that she prefers to be in an unelected House, as against an elected House, does she think that she is sending out the right message to young people?

Baroness Northover: The noble Lord will be well aware that I belong to a party which is committed to election to the House of Lords, as I think is the case for everybody in this House who is a party member. He will also know that there is cross-party agreement that the effect of an electoral system for the House of Lords should be that no party is in overall control—

Noble Lords: Oh!

Baroness Northover: —as is the case at the moment, so that you then have negotiation, discussion and the kind of debate in the Lords to which the noble Lord’s colleague referred. Therefore, yes, there should be election but under a system which is proportional and ensures that all voices are heard: women’s as well as men’s.

Democratic Republic of Congo
	 — 
	Question

The Lord Bishop of Ripon and Leeds: To ask Her Majesty’s Government on what evidence they consider the Democratic Republic of the Congo to be a safe country to which to return asylum seekers.

The Lord Bishop of Ripon and Leeds: Despite my unelected nature, I beg leave to ask the Question standing in my name on the Order Paper.

Lord Taylor of Holbeach: My Lords, we observe our obligations under the refugee convention and the European Convention on Human Rights. Every asylum application is considered on its individual merits in the light of country information from a range of sources, including fellow European and asylum-intake countries. Returns are made only if it is safe to do so, and the courts have supported our position.

The Lord Bishop of Ripon and Leeds: I am very grateful to the Minister for that response. Following the Unsafe Return report of November 2011 and continued
	documented reports of ill treatment of those who return to the Democratic Republic of the Congo in the
	Unsafe Return 2
	report of this month, will the Government use the evidence provided to challenge the DRC authorities and to set up a monitoring mechanism for those returned so that there is a minimal safety measure for them in this very dangerous country?

Lord Taylor of Holbeach: My Lords, the Home Office works very closely with FCO staff here in London and with embassy officials in Kinshasa. The embassy staff participated in the DRC fact-finding mission and stated that they were not aware of substantial evidence of any returnee being ill treated. However, I assure the right reverend Prelate that the Home Offices investigates specific allegations of mistreatment on return.

Baroness Kinnock of Holyhead: My Lords, can the Minister explain how it can be safe to return at-risk people to a country which has the biggest UN peacekeeping force in the world, when that force has to spend most of its time protecting the local population and its own security forces, and when eastern Congo is known as the world’s capital of rape, which is routinely used as a weapon against vulnerable women? Surely this is a case of the Government having no understanding of the real threats and dangers faced by people in the DRC.

Lord Taylor of Holbeach: I know of the noble Baroness’s interests in this issue and the diligence with which she pursues them, but perhaps I can refute her suggestion that these matters are taken without proper due care and diligence by the Government. Perhaps I can illustrate that best by saying that in 2009 there were 98 enforced removals to that country; in 2012, the number was down to 14; in the first quarter of this year, it was one; and in the second quarter it was also one.

Lord Avebury: My Lords, does the noble Lord accept what the DRC ambassador told me—that,
	“deportees are interrogated on arrival … to allow the Congolese justice system to clarify their situation”?
	Does he therefore accept that although we do not routinely investigate or monitor the treatment of returnees, the evidence collected in the report that was mentioned by the right reverend Prelate—of the pattern of interrogation, arrest and ill treatment of refused asylum seekers—is strong enough to warrant an independent investigation of the treatment of these returnees? Can my noble friend say what it will take to get a country removed from the list of safe countries?

Lord Taylor of Holbeach: I thank my noble friend for making sure that I had seen a copy of Catherine Ramos’ report; in fact I had been briefed on the report, and the Home Office is taking it seriously. This report is being considered in detail, just as we considered the first one in the series. It was published at the beginning of this month. The initial view, considered
	against other evidence, including the information that we have from other European countries, is that it will not warrant a change in our returns policy.

Baroness Smith of Basildon: My Lords, does the Minister understand the concerns about the quality of decision-making? Some 30% of appeals against initial asylum decisions were allowed, meaning that nearly one-third were wrong. In more than one in 10 cases reviewed by inspectors, selective information from the country of origin reports had been used to deny claims. We have to get this right because asylum should be granted only when it is genuinely needed, but there is now a serious fear that those at great risk of violence are being denied a safe haven.

Lord Taylor of Holbeach: I hope that the noble Baroness was impressed by the figures that I gave earlier and that she understands that this process is undertaken with proper deliberation. The current country case law from the immigration and asylum Upper Tribunal concludes that there is no evidence that failed asylum seekers involuntarily returned to the DRC face a real risk of persecution or ill treatment merely because of an unsuccessful asylum claim in the UK. This was a conclusion upheld by the Court of Appeal in 2008. In 2012 the Court of Appeal found that country guidance remains the law until it is set aside or superseded.

Scotland: Underoccupancy Charge
	 — 
	Question

Lord McAvoy: To ask Her Majesty’s Government what assessment they have made of the report published by the Scottish Parliament about the effects of the under-occupancy charge in Scotland.

Lord Freud: My Lords, the Scottish Parliament’s report is an interesting and reasoned discussion of the early months of this policy. It suggests that it is difficult to assess impact at this stage, a view that we share. That is why we are undertaking a two-year evaluation on the effects of the policy. Initial findings will be available in 2014, the final report published in late 2015.

Lord McAvoy: My Lords, I thank the Minister for his Answer. However, the report indicates that 82,000 households in Scotland are affected by the bedroom tax, with an average cost to those households of £50 a month. Some 80% of those households include a disabled adult. Does the Minister still stand by his advice, as published in the Daily Record, that in order to cope with that cost, disabled people should take in a lodger?

Lord Freud: My Lords, there is a range of things that people can do, as I have said to the House on previous occasions. The best option will depend on the circumstances. The group of disabled people on higher-rate DLA is 17% of the total. We have provided a lot of discretionary housing payments—we topped them
	up—and it is interesting to read in the report that many councils are saying that they are managing with that figure at this stage but that it is too early to tell.

Baroness Gardner of Parkes: My Lords, is the Minister aware of the research reported in the press this week on this subject which said that one in 10 of the claimants affected by this policy has moved off benefits? Will he confirm or comment further on that?

Lord Freud: My Lords, I have seen the research to which my noble friend refers. Clearly, it is encouraging. I also note that the report by the Scottish Parliament states that in one area the case load has fallen already by 15%. As I said just now, we need to be cautious about early findings but this one clearly is positive.

Baroness Hollis of Heigham: My Lords, the Minister has stated that the bedroom tax will release larger, underoccupied properties for the waiting list but 80% of those on the waiting list want the selfsame smaller properties as the underoccupiers who have priority. This report shows that it will take three years to rehouse underoccupiers. Will the Minister therefore accept that it is false to claim that the bedroom tax will help those on the waiting list? On the contrary, their waiting times will probably double.

Lord Freud: My Lords, I must make the point that while the party opposite likes to use the expression “bedroom tax”, it is deeply misleading. A tax is when you take away money that people earn. We are limiting the amount of money that the taxpayer pays to people. There are 1.4 million one-bedroom properties, which become available at the rate of roughly 100,000 a year. Quite a lot of people are likely to want to keep an extra bedroom because they have the resources and the desire to keep it. Therefore, there will be a period of adjustment, and we are going through it. We are spending the discretionary housing payment to allow that transition to happen in an orderly way.

Lord Skelmersdale: My Lords, will my noble friend confirm that housing benefit, first, is paid for private sector accommodation and, secondly, that under the previous Labour Government it was restricted to a certain number of rooms in those circumstances?

Lord Freud: My Lords, my noble friend is right that the private rented sector basis is the local housing allowance, which is paid on the shape of the family who occupies. It is paid on the basis of how many rooms are required. Until now, there has been an imbalance between the provision in the social rented sector and the private rented sector, which this policy corrects.

Baroness Sherlock: My Lords, the evidence is mounting. On top of evidence from the University of York and the University of Cambridge, in the past week alone the Archbishop of Wales has slammed the effect on Wales and now we have concerns from the Scottish Government. Perhaps most telling of all is a report I read this week in the Spectator by Isabel
	Hardman in which she suggested that Ministers were now referring to the spare-room subsidy as “Lord Freud’s idea” in an attempt to distance themselves from it? Would the Minister like to take this opportunity to rebut that outrageous slur?

Lord Freud: My Lords, a good idea has many fathers. Clearly, everyone in this Government is responsible for the bedroom tax and I am one of them.

Lord McFall of Alcluith: My Lords—

Lord Hill of Oareford: It is the turn of the Liberal Democrats.

Lord Storey: My Lords, I was shocked to discover that on Merseyside councils have left unused hundreds of thousands of pounds of discretionary housing payments. Will the Minister comment on that? Does he think that perhaps that money could be rolled over to future years or used in authorities where it would be used?

Lord Freud: My Lords, we are currently looking very hard at what the support should be in the next year and possibly beyond so that we will have a smooth transition for this policy. One interesting thing is that there is a real economic mismatch, which I have talked about, in what we are building for people: we have 60% of people requiring single bedrooms and we are building only 13% in any one year. There is an economic mismatch so the signals must be corrected and that is one thing that this policy does.

Lord McFall of Alcluith: My Lords—

Baroness Anelay of St Johns: My Lords, we have reached 30 minutes.

Arrangement of Business
	 — 
	Announcement of Recess Dates

Baroness Anelay of St Johns: My Lords, my right honourable friend the deputy leader of the House of Commons has made a Statement on the sittings of the other place up to January 2015 and it may therefore be for the convenience of this House if I do the same. To save any Members reaching for their diaries, a note of all the dates I am about to announce is available in the Printed Paper Office and will be circulated with the next edition of Forthcoming Business. I stress that I make this Statement with the usual and, as ever, very necessary caveat that each of these dates is subject to the progress of business: they are provisional dates. Since I am giving such a long forward look to January 2015, I am sure that that will be appreciated.
	I have already announced the autumn long weekend and the Christmas Recess. I hope to provide for a short recess in February, rising on 12 February and returning on 24 February. We should rise for Easter at
	the end of business on 9 April and return on 28 April. For Whitsun, we rise at the end of business on 21 May, returning on 2 June. We will rise for the Summer Recess on 30 July and return on 7 October. For Christmas, we should rise at the end of business on Wednesday 17 December 2014 and return on Tuesday 6 January 2015.
	I hope that the House will accept that this is a long-range forecast and I hope that it will be welcome. I know that noble Lords have been anxious to be able to plan their year next year, but, of course, everything is subject to the progress of business. I expect that the Queen will open a new Session of Parliament in State in the course of the spring but the dates of Prorogation and State Opening will be announced later in the usual way.

Business of the House
	 — 
	Timing of Debates

Moved by Lord Hill of Oareford
	That the debates on the Motions in the names of Lord Shipley and Lord Greaves set down for today shall each be limited to 2½ hours.
	Motion agreed.

EU: UK Membership
	 — 
	Motion to Take Note

Moved by Lord Shipley
	That this House takes note of the economic impact of the United Kingdom’s membership of the European Union.

Lord Shipley: My Lords, I am very grateful for this opportunity to discuss the economic impact of our membership of the European Union and I thank all those Members of the House who will contribute to the debate, particularly my noble friend Lord Wrigglesworth, a colleague over many years, who will be making his maiden speech. I thank the Library for its excellent briefing and acknowledge the excellent set of essays launched this week by Regent’s University London which cover extremely well the issues we shall be discussing today.
	I am conscious that we have had a number of debates on aspects of the EU in recent months but there are two reasons why I feel that a debate on the economic benefits is very important now. First, over the summer and early autumn a number of companies and professional bodies have been making their voices heard in support of our continued membership of the EU. Secondly, I have been very concerned that discussion in the media about the EU has tended to concentrate on issues other than economic benefit. Immigration, our net budget contribution, state benefits and health tourism, for example, all feature strongly. Each of
	these is clearly important but some, such as health tourism, are not just an EU matter. All these areas rightly reflect public concern and so they need to be constantly reviewed and debated but, I submit, we should do this as members of the EU, just as they do in the other countries of the EU, so that we understand better, for example, state benefit rules and how they should apply between countries, given the enormous differences that exist.
	However, the issue of state benefits is not just a UK matter. I was interested to note reports earlier this week that in Germany more than 10,000 British people are receiving unemployment benefit—some 10% of the British population resident in Germany. That reflects the fact that we live in a world in which national borders have less meaning. Transport is easier and cheaper than it used to be and both employers and employees want mobility of labour across borders. This is a changing world and we cannot opt out of it.
	I congratulate the Mayor of London on his leadership on this matter earlier this week and on several previous occasions in explaining London’s role as an international capital. However, perhaps the Government should think further about how they can invest more quickly in public services in areas where private sector employers recruit workers in significant numbers from elsewhere in the EU, because that can strain public services. I believe that that would build support for the EU.
	I mentioned a moment ago our net budget contribution, but that is less than 1% of annual government expenditure. A number of other EU states are also net contributors, but the economic benefits of our membership matter a great deal more than how much we pay each year to belong. Of course we should examine closely what we pay and fight our corner, but it is not the central issue. We should never downgrade the overriding reason for our being members of the EU. That reason is economic, because the size of our economy, our growth prospects and the creation of new jobs in a fast-changing world depend fundamentally on our continued membership of the European Union.
	I cut my political teeth in the referendum in 1975, in the all-party yes campaign in the north-east of England. The EU has since then proved to be hugely important to the exporting success of the north-east of England, which is the only part of the UK with a positive balance of trade, a high proportion of which is with the EU. For that reason, I want to draw attention to two firms which have committed themselves to the north-east of England as result of foreign direct investment, both of which have made recent public, unprompted statements about our membership of the EU.
	First, Nissan has made it repeatedly clear—again, only a few days ago—that the UK continuing as a member of the EU is very important for the company. More than £125 million has been committed to the Sunderland factory. It is a wonderful success story, with more than 6,000 employees making vehicles which are exported into the EU and across the world. The second firm is Hitachi. The president of Hitachi recently confirmed that he met the Prime Minister last spring and said that if the UK pulled out of the EU, it could
	jeopardise £1 billion of funding for Britain’s railways and nuclear energy. In August, Hitachi Rail Europe said that its investment in an £82 million factory in Newton Aycliffe resulted from its strategic decision that the UK should be its gateway to the EU single market. I also understand that the Japanese Government have warned that UK jobs could be at risk if we leave the EU.
	The Engineering Employers’ Federation, which is a trade body for UK manufacturing, recently reported that 85% of manufacturers say that Britain must stay in the EU, leading from within and not putting investment and jobs at risk. They want the single market to work better, but they do not want to exit from it. They say that the UK must remain part of the EU with “no ifs or buts”. They know that the UK’s relationship with Europe and the EU is vital to our economic success because the single market is our largest export market. The British Chambers of Commerce has reported that although businesses want more decisions made in the UK, most members think that withdrawal from the EU would be bad for Britain. A CBI survey published last month of more than 400 businesses showed that almost four out of five firms favoured staying in the EU, including 77% of small and medium-sized enterprises. Just 10% think it is in their interest for the UK to leave the EU; that is 11% of SMEs. The CBI says that despite frustrations over the current relationship and the burden of some regulations, particularly employment law, the survey shows that most businesses feel that the positives more than outweigh the negatives. Those negatives are primarily seen to be unnecessary regulations. The CBI wants to see rules implemented evenly across all member states, with an end to the gold-plating of EU legislation in the UK.
	What then of financial services, which contribute £1 in £8 of our tax revenues? The City of London Corporation made it clear in a note this week that the financial sector based in the UK cannot be treated as distinct from Europe. The reason is that London’s role as a financial centre is international. The corporation points out that financial markets in the EU and the UK are intermeshed in a common regulatory structure. Non-European firms come to London because it is both international and within the single market at the same time. Crucially, and I quote directly from the note:
	“The UK’s priority must be to oppose policies that could lead to the fragmentation of that Market. Fragmentation of the Single Market in financial services could drastically reduce the efficiency of the Single Market and European businesses’ access to capital. London’s position as the most prominent international financial centre in the world would be put at risk by an imperfect Single Market in financial services in which rules and access differed by level of membership of the EU. This could also damage the interest of euro-area headquartered firms”.
	That is very clear advice. The key question we should ask those who believe that we should withdraw from the EU is this: what problem are you trying to solve? Put another way, is the UK being held back by the EU? A million extra jobs have been created here since 2010—inside the EU. The idea that leaving the EU would boost jobs more lacks evidence and credibility.
	We hear it increasingly claimed that the future for Britain lies in the emerging economies; that these days, we should fly over Europe because more business can
	be done further away. But what those who pursue this line of reasoning fail to explain is why we cannot build trade with emerging economies as well as increasing trade within the EU.
	Germany exports four times more to China by value than we do. Germany does it as a member of the EU. Norway is often cited as an exemplar for the UK inside the European Economic Area. Norway has no direct power in the EU, no seat at the table, no votes, but it still has to abide by directives and bills just as the full members do. Norway has to implement three-quarters of all EU legislation, including the working time directive, other employment laws, consumer protection, environmental policy and competition laws. It has to contribute to EU budgets. Norway’s per capita contribution is just over £100; the UK’s net per capita contribution is £128. If we joined the EEA there would be little saving.
	Switzerland is often cited as another example we might emulate. But being outside the EEA, it has no right of access to the single market and has to negotiate each and every case separately. Even Switzerland contributes to EU budgets at £53 per capita.
	What do other EU countries say about the EU and British concerns, particularly regulation? President Hollande said earlier this year that there might be a “differentiated” Europe. The Italian Prime Minister said in July that there might be treaty changes for a more flexible Europe in the interests of the UK but also in the interests of countries such as Italy. The Dutch Government have proposed defining subsidiarity as, “European where necessary, national where possible”. Chancellor Merkel said in May that it could be that some things “could be better done at a local level”.
	All these confirm that the long history of flexible integration is alive and well in the EU today and we should build on it. Lots of people across Europe want us to do that and to show leadership in a reform programme. We should not forget that 3.5 million jobs in the UK are linked to our membership of the EU; or that 47.5% of our export of goods and services goes to other countries in the EU.
	I am grateful to the French Chamber of Commerce in Great Britain for reminding me that there are 1,500 French subsidiaries in the UK employing 330,000 people, that the UK is at the top of the European foreign direct investment rankings and that the EU accounts for nearly half of foreign direct investment in the UK. With figures like that, the idea that it is somehow in our national interest to quit the EU defies belief.
	There are several reasons why firms want to move into the UK, including the gateway to the single market, the English language, the quality of our legal system and our excellent workforce. For many, the single market is the most important. A single market of 500 million people means that they and we benefit from a common set of rules which enables businesses to generate wealth without having to comply with many different sets of regulations. We need to defend the single market and deepen it to drive up UK jobs and growth. We need a continuous process of reform, but completing the single market would further reduce internal barriers to trade, particularly in services, which
	our Government think could generate a 7% increase in GDP—a great deal higher than the 0.4% of GDP that goes to our net budget contribution. There are many discussions going on around regulation. Some of them may be justified and there are discussions that will be pursued in Brussels and elsewhere about this matter. However, we should note the success of the Government in tackling regulatory issues and their continuing work in that area. Some 1.4 million UK small businesses are now exempt from certain EU accounting rules, which demonstrates that the EU is willing to reduce red tape for small businesses and it is in the interests of all member states that this process should continue.
	If we left the EU, we would probably operate within a “most favoured nation” status. That would mean that 90% of UK exports to the EU by value would face tariffs. As well as that, UK consumers would face higher prices on goods bought from the EU and from those countries with which the EU had trade agreements. These increased prices would be counterbalanced only slightly by lower food prices.
	If we were in the EEA, trade would be tariff-free and, as with Norway, we would have to implement three-quarters of EU legislation in which we would have no say. We also need to be careful about the rules of origin. Goods imported into the EU via a full member of the EU can move freely once the relevant entry tariff has been paid, but those that come through an EEA country have to apply the rules of origin, a process that will take time and money.
	This week we have seen a trade agreement signed with Canada after four years of negotiation. There are now 46 trade agreements in place, with a further 78 pending. If we left the EU, we would lose access to every EU trade agreement with a third party, and each would have to be renegotiated.
	Exit would mean no extra funding for the poorer parts of the UK. Between 2014 and 2020, £6.2 billion will be committed in ERDF and ESF to the UK.
	In conclusion, problems with the EU can be addressed. Problems related to the eurozone can also be addressed because it is not essential to be in a single currency to be part of a single market, as we have successfully demonstrated over many years.
	In a recent speech at Chatham House, the Deputy Prime Minister said that,
	“the idea that we can float off into the mid-Atlantic, bobbing around in a new network of relationships without a strong anchor in Europe, while countries around the world ... are working more and more in regional blocks, is clearly not a sound strategy in a fast-moving, fluid and insecure world”.
	He is right. We must strengthen our economy, not weaken it, and we can do that only through continued membership of the EU, with the UK at the heart of EU decision-making. I beg to move.

Baroness Noakes: My Lords, I congratulate the noble Lord, Lord Shipley, on securing this debate. Like him, I am looking forward to the maiden speech of the noble Lord, Lord Wrigglesworth. The noble Lord, Lord Shipley, and I can at least agree that whether there are any economic benefits from the UK’s
	membership of the EU is an important issue, but there, I fear, we part company. In my six minutes I will not be able to answer all the points that the noble Lord has erroneously raised today.
	I have a pretty clear view. There are no net economic benefits of the UK’s membership of the EU. That is, the economic costs of membership outweigh the benefits and I suspect that this has been the case from the very first day that we joined the EU. Successive Governments—including, I regret to say, the current Government—have refused to commission a proper economic cost-benefit analysis of our relationship with the EU. The dominant pro-European bias in Whitehall, which takes its lead from the Foreign Office, can almost certainly take the blame for this, but I have never understood why the Treasury, where economic reason should reign, has gone along with it.
	The Library’s helpful note for today’s debate shows the difficulties in estimating the economic outcome from EU membership. The studies quoted in that note show a big range from plus 6% to minus 5% of GDP. However, the Library does not appear to have seen Professor Tim Congdon’s 2013 estimate of the costs of membership which has just come out. He finds that the cost of the UK’s membership is an astonishing 11% of GDP. That is, we are worse off by 11% of our GDP each and every year that we remain EU members.
	The largest single element, amounting to over one-half of the total, comes from the cost of regulation: the Social Chapter, financial services regulation, the renewables’ agenda and a host of other regulations. The Prime Minister is in Brussels today, again attempting to restrain these intolerable burdens. I expect this effort to fail as all others before have failed. Regulation is the Commission’s weapon of choice for preserving its hold over member states.
	The second largest element of the 11% is the cost of resource misallocation, which accounts for around 30% of the total. The common agricultural policy, with its protectionism and overt subsidy of uneconomic agriculture, has often been seen as the main villain when it comes to resource misallocation, but that is now only a small part of the overall picture. Much more important are the impacts on both basic and high-technology manufacturing from tariff and non-tariff barriers. In 2005, these were estimated by Patrick Minford and others to be of the order of 3% of GDP. Nothing has significantly changed in the intervening years to moderate that estimate.
	Professor Congdon is clear that a withdrawal from the EU would not lead to an immediate boost to the UK’s economy of 11% because much of the damage has already been done in terms of killing business enterprise in the UK. It could take a decade or more to recover—but at least it would start to move in the right direction.
	There is a lot of scaremongering about what would happen if we left the EU, but one thing that is completely untrue is that 3 million or more jobs associated with exports to the EU would be at risk. We are a net importer from the EU and so more EU jobs depend on trade with the UK than the other way round. If the 3 million figure is correct, we are probably talking
	about well over 4 million European jobs resting on trade with us. Therefore it is fanciful to think that the UK would not continue to trade with the EU—it is just that we would probably do so via free trade agreements. We would certainly not need to be tied into the unsatisfactory Norwegian and Swiss arrangements which have already been referred to. Just as now, a minority of our trade would be with the EU. The proportion of our exports going to the EU has been declining for several years and, once we eliminate the Rotterdam-Antwerp effect from the statistics, is probably now below 40%. That it is getting less is a good trend. We need to diversify away from dependence on markets which promise low or no growth.
	The single market may have made it easier for UK businesses to do business with Europe but that has come at a huge cost, with UK businesses concentrating far too much on markets which have performed badly compared with the rest of the world. UK businesses would now be in a far better position if they had concentrated on the higher growth markets in the world, including the USA, which remains our largest single trade partner. I congratulate the Government for their emphasis on overseas trade and encourage them to do more to ensure that, in particular, our small and medium-sized enterprises get access to the support, finance and advice that they need to grow in markets outside the EU.
	The lack of an economic case for membership of the EU is one reason why I support a referendum on our membership of it. I believe there is no economic case for our membership and that, even if we were to renegotiate its terms, that would remain the case. We would be crazy to remain in membership if the economic case were not made.

Lord Watson of Invergowrie: My Lords, I, too, congratulate the noble Lord, Lord Shipley, on initiating this important debate. I am absolutely clear that membership of the EU is very much in the best interests of the UK—in economic and social terms, and in terms of the influence that the country can bring to bear both within the EU and globally. I would be very concerned about our isolation in relation to all of those aspects should we walk out on the family that is the European Union.
	The EU and our place within it really are too important to be used as a means of dealing with a little local difficulty within the Conservative Party, which is what is happening with regard to the increasingly shrill voices that the PM eventually answered with his plan for a referendum by 2017. The Prime Minister claims that it will be to decide on changes that he hopes—somewhat fancifully, I suggest—to negotiate. However, if that fails to materialise then pressure from within his party would surely mean that we would be stuck with a “Should we stay or should we go?” vote. I would characterise that as the Clash option, for those of a certain age and musical tastes. It is also an uncertain road down which to travel. Fortunately, the Prime Minister first has to clear a certain hurdle in 2015, which gives us some hope of this vital matter being taken out of his hands.
	When those of us who are in favour of retaining, and indeed strengthening, our place within the EU cite the dangers inherent in disengaging, we are characterised rather disparagingly as scaremongers, as the noble Baroness, Lady Noakes, has just done. If that is the case, it is a label that sits rather uneasily on some rather significant public figures. Sir Nigel Sheinwald spent five years as ambassador to Washington and three years as permanent representative in Brussels. He has said that a Britain on the sidelines is not in anyone’s interests, and that a Britain on the sidelines of Europe—and even more, out of Europe—would not be in the US interest or in the interests of our other major European partners. The noble Lord, Lord Browne, a former boss of BP, one of the most senior non-executive appointments by the coalition, has warned that years of uncertainty about whether the UK will remain part of the EU will put off investors, leading major companies to place major job-creating projects elsewhere in Europe.
	Expanding on that last point, Sir Andrew Cahn, vice-chairman of Nomura, spelled out how a major company might react when considering a billion-dollar investment in Europe. Their advisers, he said, would tell the company that they,
	“do not know if the UK will be in the single market in five years’ time and have no idea what their access terms will be”,
	should the UK leave, as there would be no way of knowing whether the UK would find a sustainable relationship with the EU or find itself involved in fractious exchanges. He said that those advisers would say:
	“Indeed, we have no idea what Britain’s EU strategy is”.
	He then said that while the CEO of that company may well still be tempted by Britain, the balance would have shifted and he or she would now,
	“examine the European alternatives more closely”.
	Moreover, Martin Sorrell, chief executive of the global company WPP, has said:
	“At the very best it”—
	a referendum—
	“will be neutral in impact; at the worst, negative”,
	on foreign direct investment. As the noble Lord, Lord Shipley, said, the CBI has also said that it is essential that we stay at the table to bang the drum for businesses and defend our national interest.
	These are not insignificant individuals and they are not bound in any way by party political interests. They unquestionably know what they are talking about. Those of us who are in favour need to start making the positive case for remaining within the EU. We should not just counter the negatives of the doomsayers; we need to talk the case up. Indeed, there is a good, solid case to be talked up.
	The noble Lord, Lord Shipley, has already quoted the CBI/YouGov survey announced last month, which demonstrated that eight out of 10 firms say that the UK must stay in the EU. Surely that level of support cannot seriously be questioned. Furthermore, significant numbers of those surveyed believed that the current relationship had a positive impact on their own businesses on issues such as the ability to buy and sell products without taxes and tariffs on trade flows in the EU markets and, indeed, outside those markets as a result
	of trade deals. Having common product standards across the EU was also cited as being of considerable importance. That is hardly surprising because, of course, the EU single market is the world’s largest trading bloc, worth some £10 trillion a year. It is home to 500 million consumers and is the destination of half of the UK’s exports. Surely being part of this large single market makes our entire economy more competitive. Even firms that do not export face more domestic competition, which benefits consumers. In addition, EU membership gives access, through trade agreements, to 37 other economies around the world. If we were to leave the EU, we would have to negotiate each of these deals again, but this time as a country of 60 million people rather than a continent of half a billion people.
	Surely the biggest challenge facing the UK today is not Europe; it is the economy, and the priority is to deliver jobs and growth. I repeat my opening remarks that the UK’s interests clearly lie in remaining at the heart of the EU and I believe that that view should be increasingly argued at every opportunity. At the moment in Scotland, we are involved in a campaign to, we hope, keep the UK together. Those in favour of that position are campaigning under the name Better Together. I suggest that that slogan should also be used in terms of the UK’s relationship with the EU.

Lord Hannay of Chiswick: My Lords, at a time when many are expressing doubts about or are ignorant of the benefits to Britain resulting from its membership of the EU, and others are campaigning with zeal and hyperbole for us to withdraw, it obviously makes good sense for this House to debate the economic impact of our membership even if the economic arguments can never be the whole story—as, indeed, they were not when the British people voted in an “in or out” referendum in 1975. In that context, I warmly welcome the initiative by the noble Lord, Lord Shipley—and, indeed, his introductory speech—to hold this debate and pay tribute to the way in which the Liberal Democrat party has consistently promoted and supported our membership.
	Debates in your Lordships’ House provide neither the time nor the appropriate occasion to marshal the whole econometric case relating to the economic impact of our membership. Those in search of that could do worse than study the Regent’s University report on the costs, benefits and options for the UK in Europe, to which the noble Lord, Lord Shipley, also referred and which was launched earlier this week by Mr Peter Sutherland. Even that sort of detailed study of the subject matter of our debate today suffers from one major weakness: it is not actually possible to calculate with precision where Britain’s economy would stand today if we had not joined the European Community in 1973, and where it would be likely to stand were we to withdraw at some point in the future. That is why, personally, I treat with some scepticism the precisely quantified predictions of both supporters and opponents of membership as to its impact. These have to be qualitative judgment calls if they are not to be easily refuted.
	Clearly, one has to start with trade. We saw the removal of myriad barriers that used to impede trade between this country and the rest of Europe before we joined the customs union, and then we took the lead in shaping the single market. Imperfect though that market may be, what we now have has led to a huge expansion in mutual trade to the benefit of our economic actors, in both the goods and services sectors, and of our consumers. Outside the European Union, many of those benefits would not have occurred or would be at risk if we were to leave, as we ceased to have any control over the shaping of the regulations governing our trade—the position in which Norway, which has a smaller and much less diversified economy than ours, now finds itself.
	The impact on our trade outside Europe has also been important. As a member of the largest trading bloc in the world, which negotiates as a single unit on trade policy matters, we have benefited both from the protection that that provides against discriminatory treatment by third countries and the leverage that it gives in prising open the markets of others. If noble Lords doubt that, they should talk to the Scotch Whisky Association. Those who say that we would be better placed if we promoted our exports outside the European Union need to explain why the Germans, who have been in the Union for longer than us, have fared so much better in their trade with China than we have. The Mayor of London, trailing his Eurosceptic robe through Beijing, should provide some specifics about why he thinks we would do better if we had to negotiate trade policy with the Chinese on our own. Why is it that Canada, Japan, the US and India are all negotiating freer trade deals with the European Union? That is where the benefit lies for them, and where it lies for the members of the Union.
	On investment, this country has often lagged behind, and still does, in the investment league tables among developed countries. However, where would we be if we had not consistently been either first or second among the economies that attract overseas investment into Europe? How much of that investment would come here—and would come in the future, if we were unwise enough to leave—if we were not able to provide a base within the European Union and a strong voice in its councils? A lot of British jobs rely on the answers to those questions, even if they cannot be precisely quantified.
	In this country, the European budget is usually regarded as a clear minus in any calculation of economic impact. That is understandable, as we are and will remain a net contributor to the budget, albeit mitigated by the substantial rebate won by Lady Thatcher. However, the programmes funded by that budget in agriculture, in regional and sectional support, and in scientific and industrial research are of real value to important parts of our economy, and could not be easily or straightforwardly replaced by national spending. Try asking any of Britain’s leading research-based universities how they would fare if European budget-funded research was not available to them, and you would get a pretty clear answer.
	Almost invariably, policymakers overlook the unintended consequences of their policy decisions. Occasionally those unintended consequences are benign, but more often they are negative, often seriously so. Given the degree of integration of the British economy with those of our European partners that has resulted from 40 years of membership, I suspect that any active withdrawal would fall fair and square into that latter category. Let us hope that debates such as the current one will at least put us on our guard as to the risks we would run if we were ever so foolish as to venture down that road.

Lord Desai: My Lords, I thank the noble Lord for introducing this debate. He said that he cut his teeth on the 1975 referendum. Fifty years ago, when I was finishing my PhD, my first job offer was to inquire into the relative merits of the six nations that had joined themselves together under the treaty of Rome as against the seven who formed EFTA—so I have lived with this problem for much longer. The debate about whether we should be in or out of Europe will never be over, whichever way the referendum goes. The 1975 referendum did not settle any of these matters, and neither will the 2017 referendum, which will no doubt decide that we should stay in the EU.
	I will talk in particular about the topic of economic impact, not about a referendum, because that is the topic before us. In light of what the noble Baroness, Lady Noakes, said, I will take up that question. As the noble Lord, Lord Hannay, said, one thing is certain—that there is no certainty about the economic impact of the United Kingdom’s membership of the European Union. The excellent document that the Library has produced shows the cost to range from between minus 6% to plus 8%; and as the noble Baroness said, the new UKIP document—written by Tim Congdon, for whom I have great respect—says that the figure will be minus 11%. So the figure ranges from between minus 11% to plus 8%. It is probably anybody’s choice. The problem is that each person answering the question grasps a different part of this elephant.
	I want to say two things about the figure of 11% arrived at by Tim Congdon. There are two large items in his calculations. The cost of regulation is 5.5% of GDP, and the other major cost is resource misallocation, which is 3.25% of GDP. That comes to 8.75%, which, subtracted from 11%, leaves about 2%. So those two numbers are worth examining in more detail.
	As for the larger item—the cost of regulation—let me just list the social directives that are supposed to be costly. They include the safety and heath at work directive, the works council directive, the parental leave directive, the race directive, the equal treatment directive, the working time directive and the gender equality directive. Let us suppose that we were not in the EU. Would we necessarily not have some of those directives? Would we not have the race directive? Would we actually say, “No, we want a racist society”? Would we not have a gender directive of some kind? Do we not already have health and safety legislation? Are we going to jettison that? A proper comparison would be:
	if we leave, what sort of regulation will we keep, and what is the differential effect of being inside the EU rather than outside the EU?
	Similarly when Tim Congdon costs resource allocation, the one definite number he has is that the cost of the common agricultural policy—which I have long opposed—is about 0.5% of GDP. The rest of the cost is computed from a study of tariff and non-tariff barriers in the EU by Patrick Minford which is about eight years old. I have not had time to look at it in detail, nor do I have time to talk about it in detail, but I believe that some of those tariff barriers have disappeared. We ought again to calculate properly whether there are still such tariff barriers within EU trade, and if so, determine whether they are likely to be removed, or whether we will have to live with them. Also, if we leave the EU, what sort of tariff barriers would we face vis-à-vis the remaining EU?
	I believe that on all these questions we ought first to calculate the impact costs, and then ask which bits we can remove, examine the counterfactual and allow for the uncertainty of all calculations. I think we will arrive at the conclusion that there is nothing definite to be said about this issue—but then, that is the nature of economics.

Lord Wrigglesworth: My Lords, it is a great honour and a great pleasure to address your Lordships’ House for the first time. I do so with some trepidation as it has quickly become apparent that I have a great deal to learn about the workings of your Lordships’ House, not to mention its myriad nooks and crannies. However, that learning process has been made easier and more pleasant by the warmth of welcome from the staff and from all sides of your Lordships’ House, particularly from so many old friends and colleagues, and also by the excellent induction programme provided by officers of the House and by my noble friends.
	I am also grateful to my two sponsors for their support and encouragement. In one sense it was my noble friend Lord Rodgers who first got me into all of this. It was in his victorious by-election campaign in my home town of Stockton-on-Tees way back in 1962 that I cut my political teeth. That process was aided and abetted later in that decade by my noble friend and former student flatmate Lord McNally, with whom I was actively engaged in student politics, among other things. It was a great honour and pleasure later in my life to represent Stockton-on-Tees in the other place. I thought it might be wise, before speaking today, to look up the maiden speech that I made nearly 40 years ago. I have to tell noble Lords that the only thing it reminded me of was my age.
	The north-east and its history have been responsible for moulding my politics and my attitudes from my earliest days. From up there, Leeds and Manchester are down south. The scourge of unemployment has left an indelible scar on me and many others over the generations, not least on the first noble Earl, Lord Stockton, who, as Harold Macmillan, served as the town’s MP between 1924 and 1945. The region has been transformed in the past few decades and has many vibrant new industries, but it is profoundly
	depressing that, after all these years, the unemployment rate still remains the highest in the United Kingdom. I have spent most of my life trying to do something about that, serving on bodies such as the Northern Development Company, the Northern Way, the NewcastleGateshead Initiative, as chairman of the Northern CBI and latterly as deputy chairman of the advisory panel for the Government’s regional growth fund. I am sure that if it had not been for these, and the work of many other bodies such as One North East and the new LEPs, things would have been worse than they are today.
	When my electorate passed a vote no confidence in me in 1987, I started a new business career in London and the north-east. After a few years of working in industrial property, a partner and I launched UK Land Estates. It has become one of the biggest investors and developers of industrial and commercial property in the north-east with more than 2,000 businesses now as tenants. I declare an interest in that company and in my own business, the Durham Group. Until last year I also had the pleasure of chairing the Port of Tyne. It supports some 10,500 jobs in the region and contributes £0.5 billion to the region’s gross value added. During my time it has grown to become the largest trust port in the United Kingdom by turnover and profit, overtaking the likes of Dover some time ago. It is one of the major trading gateways of the United Kingdom, connecting United Kingdom businesses to five continents via the major European ports.
	That brings me to the subject of today’s debate, introduced so ably by my noble friend and fellow Northumbrian Lord Shipley. The north-east region is the only United Kingdom region showing a balance of trade surplus. A large proportion of that surplus is in the £7 billion of exports handled by the Port of Tyne. Most significantly, it is the fourth largest import/export terminal in Europe. The main reason for that is that virtually all the vehicles exported by Nissan from the United Kingdom are shipped through the Tyne. As my noble friend said, the Nissan plant at Sunderland is the largest and most productive vehicle-manufacturing facility in the United Kingdom. It is now producing more than half a million cars a year, 80% of which are exported. It directly employs 6,400 people plus many more in the supply chain. Since it came to the United Kingdom in 1986 it has invested £3.5 billion in the plant and is investing more today. Its contribution to the north-east and to the national economy is massive. It is not surprising, therefore, that Nissan has said that Britain’s membership of the European Union is very important to it and that it wants to see the United Kingdom remain part of the single market, with its uniform standards and tariffs. I believe that its views very much reflect business sentiment across the United Kingdom. The most recent Chambers of Commerce survey showed that most businesses think that withdrawal from the EU would be bad for Britain, and CBI surveys reflect the same views.
	All my business experience tells me that confidence is the most important ingredient in any investment or spending decision. I have worked in two banks, served on the boards of many companies—large, small, public, private and co-op—and I sometimes think that the
	political community does not understand the vital importance of confidence in business decisions. Nothing undermines confidence more than uncertainty, and there is uncertainty at the moment over our country’s future in the EU. If that uncertainty increases, confidence will be damaged, but the consequences will not be immediate plant closures; instead, decisions will be taken to build the next model in Spain and not in Swindon, Solihull, Halewood, or Sunderland. That will lead to the plants gradually declining and the jobs decreasing. And who will suffer? The national economy, of course. But most directly it will be those 6,400 people at Nissan, and others like them. Even more tragically, it will be those without jobs, whose hopes will be dashed and whose families will continue to suffer. Talk of referenda and other issues in Westminster is all very well and may be unavoidable, but I hope that we will never forget the potential consequences for many vulnerable people.

Lord Selsdon: My Lords, I have the great pleasure and privilege to follow the noble Lord, Lord Wrigglesworth, and to thank him for his most interesting maiden speech. He would not know, and I had forgotten myself, that I began my own industrial activity in the north-east. There was the least business there; as a representative, you got commission in your sales, and there were no commissions to be had in the north-east, until we managed to win a contract at Blyth colliery, which was my introduction to the coal mining industry.
	I have listened to the noble Lord, Lord Wrigglesworth, before. It is strange that those who come from the northern parts of the country always speak slightly more seriously, but there is something behind the words they say that pricks. I realised what it is today when the noble Baroness, Lady Northover, spoke, and referred to the balance of power within the House and the different departments. I suddenly concluded that it is probable by my calculations that the noble Lord, Lord Wrigglesworth, now holds the balance of power. I refer him to my great-grandfather, who served in the Lloyd George coalition. Coalitions are not necessarily a good idea, because you have that awful phrase coagulation.
	Then you come to the referendums, and things like that. I got a phone call, because I found that I had to give up being in industry because I had been summoned to your Lordships’ House after my father died. I did not know that I did not have to come; I had no writ of summons—I had no knowledge of any of this. I had to change my job. A friend of my grandfather said, “You may not be bright, but you ought to be brighter. Why don’t you do some research in a research company?” I joined it, and one of our clients was JETRO, the Japan External Trade Organisation, which we visited regularly and took to London to encourage it to invest in the United Kingdom. We produced a very good report, but we forgot that the Japanese drove on the same side as we did and that therefore it was much cheaper for them to set up a manufacturer here.
	One of the main points that I wish to make today is to ask why are going to have a referendum. I was at one time treasurer of the Conservative Group on
	Europe, and had a lot of problems trying to raise money for the referendum campaign. I remind your Lordships of some of the background to this. On 28 October 1971, there were votes in the Lords and Commons that,
	“this House approves Her Majesty’s Government’s decision of principle to join the European Communities on the basis of the arrangements which have been negotiated”.
	In the Lords, there were 88.6% in favour and in the Commons 59.3%—an overwhelming majority. That led on to 1975, when the new Labour Government held a referendum and we found once more to our surprise that in response to the question,
	“Do you think that the United Kingdom should stay in the European Community (the Common Market)?”,
	64.5% were in favour. So why are we now going to have another referendum? Is it necessary, or is it a matter of internal politics? I congratulate the noble Lord, Lord Wrigglesworth, on his speech. If he has the balance of power, we know which way things will go.
	My noble friend Lady Noakes and I agree on so many things, but not necessarily on the things she says. Trade has been my lifeblood and fate. The European Union is our biggest trading partner by far, and it also represents our biggest deficit; with the exception of Ireland, with which we have a big surplus, we have a deficit with practically all the EU countries. Our biggest trading partner is still, just, the United States, followed by Germany. But it is not so much the EU that counts; it is the international development and activity that follows on a global basis.
	We have managed to attract, in recent years, a sizeable volume of foreign investment in the United Kingdom, not just in manufacturing or in service industries but in pure investment. Our balance of payments deficit in general, without invisibles, would be very significant indeed. On all areas, we have a manufacturing deficit—but the growth areas, surprisingly enough, are those that used to be those of our Commonwealth partners, where the added value is created, in agriculture, minerals or semi-manufactures. At the same time, we have encouraged successful entrepreneurs from those countries to come and invest in the United Kingdom. It will not surprise your Lordships to learn that much of the investment that has come into the United Kingdom in recent years has come from what we would once have called the third world. We can look at the success of India and the development of China and south-east Asia, and even some of the African countries that are producing growth. Our future does not lie within the EU, but it is those markets that are the closest to us and those that foreign investment companies and manufacturers are looking to serve. When they invest, they are looking to invest not in the limited United Kingdom market but in the markets with which the United Kingdom has the greatest relationships.
	It is sometimes a good idea to sit and think. I do not propose that we should have a referendum; it is a complete waste of time and money. If you were treasurer of the Conservative Group on Europe and you suddenly found one day that you had a bill for £323,000 and no money, because you could not raise any, you would feel how sensitive it is. I do not know how strong a
	campaign will be waged, but I wish that the Government would think again and that the noble Lord, Lord Wrigglesworth, with his balance of power, will make sure that we do not have a referendum. I thank him again sincerely for his contribution. I know that we will hear much from him in future.

Baroness Donaghy: My Lords, I congratulate the noble Lord, Lord Shipley, on initiating this debate, and the noble Lord, Lord Wrigglesworth, on his maiden speech. He may not remember that we worked together at Hamilton House in the late 1960s, and it is very good to have the opportunity to work with him again now. I am also glad that we have more than three minutes to speak on this debate; noble Lords who took part in the debate on the Prime Minister’s speech on Europe will remember that we were all rather rushed.
	Simply putting a case for the benefits of UK membership of the European Union will not convince many people. It is important to recognise the levers that we have and those that we face, and not to argue this in a vacuum. For instance, we will never have a mass-circulation press that loves Europe. It is a fact—and, in the words of the noble Lord, Lord Adebowale, on Tuesday—we should “get over it”. The media are more balanced about Europe, but even that leads to hysterical reactions from some newspapers about pro-European bias in the media. We have also to accept that the UK will never love Europe. Except for Guernsey and Jersey, with huge consequences for those islands, we have not had foreign enemy troops tramping across our borders; we are an island, and proud of it. We can never appreciate the strong emotional element that applies to most of continental Europe about the need to bond on economic and social alliances.
	That emotional commitment was palpable when I was a member of the European TUC for nearly 10 years. You have only to visit Jersey or Guernsey on Liberation Day—in Liberation Square, for example—to witness the effect that invasion has on people. We have to accept that our hearts will never be in the EU, and that we can live with that. However, if our hearts are not there, our heads are in Europe and I am sure that they will continue to be.
	What are the levers which will effect this? One is the number of countries desperate for entry to the club, which will convince people that there must be perks. Another is the support for social Europe from those seeking to protect workers’ rights, which will win arguments. However, it is the support of significant sections of business which will win the day. Others have already mentioned last month’s CBI survey, in connection with YouGov, which indicated that 78% of companies—both small and large—favour staying in the EU. I will not elaborate on that except to say that the majority of companies believe the EU has a positive impact on their businesses without prohibitive taxes or tariffs, recruiting staff from across the EU and participating in EU supply chains. CBI companies were against attempts to create similar employment laws across the EU, working hours being the least popular. This is hardly surprising, since the UK has a
	higher proportion of overtime worked than most other countries, with employees working longer hours and all the social consequences we know about.
	Businesses believe that the UK has influence on EU policies that affect them: 72% felt there was significant or some influence and 27% felt there was not very much or no influence. So support is not enthusiastic but it is absolutely solid. As I have been involved in negotiations most of my life, I realise that you cannot walk away from difficult problems and you cannot opt out when the going gets tough. As I have said before, the TUC and CBI meet as social partners at European level. They know about tackling difficult issues and, for a while, when some of the employment-related directives were being introduced belatedly into the UK, it might have looked as if the unions were making progress and the employers were not. Since then, the boot has been on the other foot. They will have differences on regulation of the market and workers’ rights but no one can afford to throw their teddy bear down just because a problem is difficult.
	We can do some things now, without waiting for a referendum or fresh negotiations; I thank Richard Corbett for some of this information. First, there is already a requirement for EU proposals to go to national parliaments first, with eight weeks’ notice before they are dealt with in Brussels. We should implement this, so that Ministers appear before Parliament, or the specialist parliamentary committee, to explain the issues. Secondly, there is already a procedure to check on subsidiarity: to prevent the EU straying beyond its remit. National parliaments can object to European Commission proposals. Thirdly, the Government have a duty to maximise their impact in the European Parliament and are not doing so. Tory MEPs were trafficked onto the goonish fringes and this was an unworthy move.
	We are all calling for more transparency in the EU, yet our own Government have failed to strengthen Commons scrutiny of Ministers and failed to publicise their proposals to safeguard the City of London. I could have mentioned the European arrest warrant or cross-border tax evasion, but there is insufficient time. We should not forget that tax fraud, tax evasion and tax avoidance are of such magnitude as to have an effect on government deficits. Acknowledging that employment protections are unpopular with employers, we cannot have a single market where workers’ rights are diminished in a race to the bottom. Unfairness leads to distrust in institutions and, as I have said before, employment protections have been in place for long enough to have become part of the workplace.
	Finally, some have accused the Government of being asleep at the wheel on European issues and completely concentrating on the referendum. They are not, in fact, in danger of being asleep at the wheel but of jumping into the boot and closing the lid.

Lord Maclennan of Rogart: I begin by congratulating my noble friend Lord Wrigglesworth, who has been a colleague and a friend for many years. He has brought to the debate personal experience of
	great weight and knowledge from industry and from his part of the country where he has striven so hard to make that region more prosperous. I would also like to thank my noble friend Lord Shipley for procuring this important debate which will put on record opinions and facts which will be of great importance if the country is to make a balanced decision about the future of our relationship with the European Union.
	Some of the remarks made in opposition to our membership, particularly by the noble Baroness, Lady Noakes, overlooked some facts that others have raised. In particular, the noble Baroness spoke a great deal about the burden of regulation. I recognise that it is difficult to measure the impact of this, but the OECD has produced tables—a little out of date—which show that the burden of regulation in the product market of selected countries puts the United Kingdom at the top of the list of those which are least restrictive. It was even ahead of the United States of America and way ahead of Australia, New Zealand, Poland and Greece.
	Our access to trade is not belittled by our membership of the European Union, as I think the noble Baroness implied. The focus of our trade is, rightly, with the 500 million consumers—rich consumers, by and large —in the European Union. This is a highly competitive market which also improves the quality of our production. Access to other countries is greatly assisted by the work of the European Union in opening trade to no fewer than 37 economies around the world, including South Korea, Singapore, South Africa and Mexico. The recent green trade deal with Canada is likely to see British exports increase by an estimated 29%.
	Our country could not expect to have such a high rating in attracting inward investment if we were not members of the European Union. I have seen figures which suggest that we are the third largest recipient of direct foreign investment after China and the United States of America and that the stock of inward investment is equal to half the United Kingdom’s GDP.
	I have seen in a report from TheCityUK that 60% of decision-makers specifically cited access to EU markets as a core reason for choosing the United Kingdom over other financial centres. Japan in particular—already mentioned by a number of contributors to this debate—has invested huge amounts of money in this country and created 130,000 jobs. The Japanese Government have been very outspoken and clear about why they are doing this, and we would withdraw from Europe at our peril.
	I have to say that the alternatives that have been alluded to, particularly in relation to Norway and Switzerland, would certainly not be attractive in that we would be without influence over decision-making and would have to observe regulations and rules. Switzerland does not even have direct access to the financial markets. The arguments for our remaining in the European Union for economic reasons are overwhelming and I hope that this message gets across to the wider electorate. The figures mentioned by the noble Baroness, Lady Donaghy, about the CBI’s views are telling. At the Glasgow conference the Institute of Directors produced figures showing that 80% of its members were also of the opinion that we should
	remain within the European Union. That did not mean, however, that there should not be changes and, no doubt, progressive Governments will seek change.

Lord Giddens: My Lords, I join other noble Lords in congratulating the noble Lord, Lord Shipley, on having initiated this debate. I especially add my congratulations to the noble Lord, Lord Wrigglesworth, on his maiden speech, which was witty, meaty and suave. By “suave” I do not mean to criticise; I mean that his speech was very assured. When I gave my maiden speech, I was trembling all over and could hardly hold my papers. The noble Lord is a welcome addition to this House.
	As this debate has shown, all debates in this country about the European Union now take place in the shadow of a future referendum on Britain’s membership. To me it is of the utmost importance that there should be a full and thorough public debate on this issue and I am worried that this might not happen—that is the burden of most of what I have to say. There is a real danger that Britain could sleepwalk towards exit, with many of the public simply being unaware of the seriousness and complexity of the issues involved.
	I am a committed pro-European—indeed, something of a passionate one. My noble friend seemed to indicate that we do not exist. We do exist. Many people like me feel an emotional, not just pragmatic, commitment to the European Union and what it has accomplished for the continent over the past several decades. However, I am not one of those who hold that it would be economic suicide for Britain to quit the Union. There are scenarios in which the country could survive quite well, perhaps even prosper, although its influence in the wider world would be sharply and irretrievably reduced.
	Leaving the EU would not be the marginal issue that many citizens appear to think. It would be the most consequential decision that the country had taken for 60 years and involve a protracted and wrenching adjustment. To me, leaving the EU would mean the reinvention of the country. The idea that the UK could simply leave the EU and become the same as it was in 1950, going back to having some kind of autonomy in the wider world, is simply ridiculous. An enormous process of reinvention of identity would have to occur. If it did, the country could in principle be successful, but such a course of action should not be contemplated without intensive and, above all, informed public discussion. I hope that this discussion in your Lordships’ House will be the first of many that will involve the wider citizenry, not just a proportion of people in this establishment.
	The immediate economic problems to which Britain would have to respond if it left are easy to state but, as my noble friend Lord Desai said, not as easy to quantify as many on either side of the debate seem to think. I hesitate to disagree with a colleague from the LSE, especially an economist who admits to the fallibility of economics—that is something to behold—but I spent the past six months of my life studying the economic statistics of the EU and I know that some of the assertions that are made are robust and some are
	not. For example, we know that the single market has made a fundamental contribution to the overall wealth—the GDP—of the EU, including this country. The calculation of a 2.2% net addition as a result of the single market before the 2008 crisis is robust. What are not so robust are the employment statistics. We do not really know. Between 2 million and 3 million jobs here depend on the EU, but the counterfactuals are so difficult to state that no one can simply assert that bluntly. It has been demonstrated, however, that the financial services industry would inevitably suffer if the UK left the EU. One can forget the idea that Britain could become a sort of offshore banking centre like Singapore. London could perhaps do that if it seceded from the rest of the UK, but there is no chance of that happening. There is no doubt that leaving the EU would have a serious impact on the financial services industry.
	I wish to make the more subtle argument that most of the important economic losses would stem from factors that are not wholly economic. Here I would reverse the conventional wisdom about Britain losing sovereignty as a result of its membership of the EU. It can be demonstrated that every member of the EU gains sovereignty from being a member and does so when acting alone—not just as a member. This can be done easily by reference to the proposal mentioned by the noble Lord, Lord Shipley, for the EU-US free trade agreement. That will be the single most important source of wealth and job generation for both sides that has ever been established. Could anyone think that Britain outside the EU, feebly knocking on the door and timidly asking to be let in, represents more sovereignty than if we were an active participant in the European Union when it negotiates such an agreement? That would be ridiculous.
	I conclude with questions for the Minister that lie behind everything that I have been saying and to which I should like a response. What concretely will the Government do to ensure that the open and informed debate that the country needs will actually take place? What concrete measures will they take to make sure that citizens are directly involved?

Lord Stoddart of Swindon: My Lords, I join others in congratulating the noble Lord, Lord Shipley, on introducing this debate, and I must congratulate the noble Lord, Lord Wrigglesworth, on his excellent and telling maiden speech. In another place, when we were both members of the Labour Party, he and I used to spar about this issue in the Tea Room and elsewhere, but time is short, so I must carry on with the debate.
	As some noble Lords will know, I never wanted to join the Common Market and I believe now that it would benefit this country if we left the European Union. Noble Lords will recall that when Harold Macmillan recommended that we join the then Common Market, or the EEC, he said that one of the major reasons was that Britain deserved to have the chill wind of competition. We have certainly had that. Our manufacturing industry, which in 1973 represented 32% of GDP, now represents only 10% of GDP.
	The noble Lord, Lord Shipley, referred to a number of firms, the CBI and other organisations that desire at all costs to remain in the European Union and warn of the problems, difficulties and injury that will occur to this country if we left. When I was a Member for Swindon and fighting the referendum, Lord Stokes—he was then Sir Donald Stokes, the chairman of BLMC—wrote to all my constituents and said that if we left the Common Market they would all lose their jobs and the car industry in this country would be destroyed. We decided to remain in and, of course, the car industry was destroyed by our remaining in rather than the reverse. I might add that many of the people who have been quoted were the very people who recommended that we should join the euro. It is fortunate that we did not take their advice then. Perhaps we should not take their advice now.
	I must quote some figures. We have heard a lot about the benefits of being a member of the EU, so let us now hear about some of the disbenefits. For a start, we pay a contribution of between £10 billion and £12 billion for the purpose of being a member of the EU. That represents £55 million per day and translates into £150 per person every year. In the case of a family, it is £500 per year per family. We are arguing about £100 on energy bills, yet every year each family pays £500 to belong to the European Union.
	We have heard a lot about the trade figures, so let us look at some of them. In 2007, our exports to the European Union were £318 billion. In 2012, they were £278 billion. That means that, instead of becoming a better market for us, Europe is becoming a worse one. In 2007, exports to the rest of the world were £370 billion and in 2012 they were £394 billion, so our trade with Europe is declining but our trade with the rest of the world is going up. I think that we should take note of that. Furthermore, the current adverse balance of trade is going up—shooting up, in fact. In 2007, the deficit was £40.9 billion; in 2012 it was an enormous £83.2 million. So there are figures on the other side, of which we should take notice. The EU is a declining market.
	Unfortunately, I do not have time to deal with more aspects, but I want to refer to the democratic deficit. Of course, I would like to see this reduced to nil and for us to get our own democracy and central government back. Unfortunately, that is not easy. As the President of the Commission, José Manuel Barroso, said, David Cameron’s attempt to renegotiate Britain’s relationship with the EU was doomed before it began. That really says everything about the centralised nature—almost dictatorship—of the EU.

Lord Davies of Stamford: My Lords, I congratulate the noble Lord, Lord Wrigglesworth, on a very confident and able maiden speech. It is great to have someone of that experience and background in our House. We look forward to future contributions. I congratulate also the noble Lord, Lord Shipley, on managing to get time for us to debate this matter today—a lot of time, actually six minutes per person; a good deal better than we have ever had before.
	It is almost unimaginable to me that any sane or responsible person would want to take his or her country on economic grounds out of the world’s largest trading bloc; a trading bloc which other countries are queuing up to join, which no one has ever wanted to leave and with which those who cannot join for geographical reasons are desperate to sign a free trade agreement—which is very much a second or third best. But so it is. We have people who are entirely sane and responsible—for example, the noble Lord, Lord Stoddart, and the noble Baroness, Lady Noakes—who have been taking that line today.
	I believe it is sometimes useful for these debates to be responsive and reactive so I am going to spend all of my time addressing some of the points that they have made. First, the point of the noble Lord, Lord Stoddart, has already been answered. If this country were to remain as part of the single market in any form, it would, of course, continue to have to make budgetary contributions, so there would be no saving. The suggestion of the noble Lord, Lord Stoddart, that we do not have access to the single market, is a very dramatic suggestion and I think one that he might want to think through.
	It is possible to talk all day about how many of the 3 million to 4 million jobs in this country which depend on the single market we would lose if we immediately left the single market. Obviously, there would be some and the number would tend to accumulate over time. We will never agree on what that number might be, but it would be a number, certainly. As the noble Lord, Lord Shipley, said, an even greater threat is the future loss of investment, which we would have if we stayed in the single market, which we would not have if we left the European Union. I think that would be quite dramatic. It would be dramatic in manufacturing. It is difficult to see how we would get any manufacturing at all, where manufacturing is generally producing for more than 50 million to 60 million people. People will want to put in a new facility at great expense only where they can address the single market. They would certainly not come here.
	However, the loss is not merely to manufacturing. I want to read to the House briefly from the evidence given by JP Morgan and Goldman Sachs, the two biggest investment banks in the world, to the Parliamentary Commission on Banking Standards on this subject. They are quoted in the excellent note we have had from the Library as saying:
	“We believe that a key risk to London’s retaining its status as a financial hub is an exit by the UK from the European Union. In common with financial institutions across the City our ability to provide services to clients and engage in investment activities throughout Europe is dependent on the passport that London-based firms enjoy to operate on a cross-border basis within the Union. If the UK leaves, it is likely that the passport will no longer be available, thereby forcing firms that wish to access EU markets to move their operations to within those markets”.
	It could not have been put more clearly. It is also quite clear that what they are talking about is being a full member of the single market—a full member of the regulatory system or structure. That is what they want, otherwise business will move across the water to the continent. If we ignore such a warning, I think that we are being anything but sane or responsible.
	How is it that intelligent people such as the noble Baroness, Lady Noakes, come to a different view? She is not one of those people whom one can dismiss as being driven by some sort of primitive emotion—the kind of people who get a kick out of waving flags and telling foreigners to go to hell. There are such people in our country but the noble Baroness is undoubtedly not one of them, so I shall try to address some of the points that she raised.
	She made a number of very interesting points. Like many Eurosceptics, she is becoming a little more sophisticated. They are saying, “Maybe we wouldn’t go for a deal like Switzerland or Norway because clearly that would involve us becoming”—my phrase, not theirs—“a kind of satrapy of Brussels. We really would be ruled by Brussels then”. That is the rhetoric you get from the Daily Mail today, but that would be the reality because we would have no role whatever in the decision-making structure and no chance of making our views known and influencing events, yet we would have to implement the legislation that came from Brussels. That would not be an intelligent thing to do, and the noble Baroness, Lady Noakes, thinks that she could do better.
	Indeed, a Eurosceptic friend of mine—a former Conservative Minister with whom I have been discussing Europe for 20 years—said to me the other day, “We could do better than Switzerland and Norway”. I asked how and he said something very similar to what the noble Baroness, Lady Noakes, has said. He replied, “We’ve got great power because we have a balance of payments deficit with the European continent—with the other members of the EU—so we could really put the pressure on them and cut off their exports to the UK”. I said, “So what you are actually planning is to declare war not merely on the EU but on the WTO—on the international trading system”. He did not really have an answer to that. I do not think that it is a practical possibility. It is extraordinary to think that we would leave the EU with all the risks involved to go into some uncertain future.
	There is a fundamental error in what the noble Baroness, Lady Noakes, said about the rest of the world. She seemed to think that there is a trade-off in our trade with the rest of the world and the single market in the sense that, if you have more of the one, you have less of the other. In fact, there is a negative trade-off: if you have more of the one, you have more of the other. The whole point of the single market is that with a greater specialisation within that market, the greater competitiveness that emerges as a result of that specialisation, the economies of scale and the longer production runs, you are more competitive outside the EU. Therefore, far from the EU being an incubus for us in developing non-EU markets, our presence in it is actually a major gain. That is a very important point which should not be forgotten.
	I have very little time left in which to speak but I want to say that it seems that we have a difficult and very risky decision to take. It would be extraordinarily irresponsible for us, as a country, to make a decision which could have enormous costs without being absolutely clear about what we were going forward into. Some of the things that have been said today about the Tim
	Congdon and Patrick Minford studies simply do not stand up to scrutiny. It is quite clear that we would continue to have some regulatory costs and that is not being taken into account.
	I am getting signals from the Front Bench and so I shall wind up. Once again, I pay tribute to the noble Lord, Lord Shipley, for giving us the opportunity to have this debate.

Lord Watson of Richmond: My Lords, first, I join in thanking my noble friend Lord Shipley for introducing this debate, and I add my compliments on the maiden speech made by my noble friend Lord Wrigglesworth—an old friend. Whether he will actually achieve the holding of the balance of power in this House is open for later debate, but we certainly welcome the contribution that he is undoubtedly going to make. He will bring a sharpness in the sense of realism. He has, I believe, been described as “suave”. I do not know about that but he will make a difference, which is excellent.
	I should declare two interests which are relevant to the subject. We have already heard about the impact of EU membership on the funding of university research in the United Kingdom. As High Steward of Cambridge University, I should like to say that the real dependence that Cambridge University, which in many ways is the leading science university in the United Kingdom, has on EU funding is immensely significant and would of course be threatened by an EU withdrawal. Secondly, I chair a number of companies, all of which are deeply dependent on trade within the European Union.
	There are many individuals, companies and, increasingly, countries whose good will and decisions are going to be vital to Britain’s future and which have warned us of the consequences of withdrawal. That list is perhaps in some danger of becoming a kind of litany, recited by pro-Europeans such as myself; nevertheless, the list stands and it grows: the US State Department, the German Chancellor, Nissan cars and Hitachi. Earlier this month, a survey showed that one-third of British manufacturers said that they would be less likely to invest if we quit, and a further third said that they would have to make significant changes to their business model were we to do so.
	However, in this debate on the economic impact of membership, I should like to focus not on that lengthening list and the current benefits which we might jeopardise but on the vast and new opportunities that we would forgo in world trade; namely—and it has been raised already—the momentum of the EU’s bilateral trade and investment agreements, signed, about to be signed and now being negotiated. Taken together, they represent an extraordinary new landscape of trade, and if we excluded ourselves, we would mar and impoverish our prospects as a trading nation for decades and maybe centuries to come.
	The first of these new deals was with South Korea in July 2011. As tariffs have fallen with Korea, exports have soared, giving the EU, for the first time in 15 years, a trade surplus with Korea. On the 18th of this month came the comprehensive economic and trade agreement with Canada. It is actually the EU’s first free-trade
	agreement with a G8 country and it has removed 99% of tariffs. Let us remind ourselves that the EU is Canada’s largest trading partner after the United States.
	Under negotiation is the agreement with Japan—the second biggest Asian trading partner of the EU—which could boost EU exports by a third, creating, it is calculated, up to 400,000 new jobs in Europe. The current round of talks this week in Brussels involves powerful EU pressure on Japanese non-tariff barriers, which is probably the key with Japan. Talks with India are under way, although at a much earlier stage, and then of course there is the really big one: the Transatlantic Trade and Investment Partnership, which was born of the EU-US high-level working group on jobs and growth, involving a great many top people from British multinational corporations. It could add £119 billion to the GDP of the EU. It is not going to be an easy thing to negotiate but it is an imperative for both sides. Let us remember: we focus a lot on Asia but the United States and the EU together represent 50% of global GDP and one-third of all world trade. If we withdrew from the EU, this would place us on the periphery of this new international trade landscape—vitally effective but marginalised. It would be an own goal of monumental consequences.
	Finally, the balance that we should be looking at is not just an arithmetic calculation of present benefits and penalties. Underpinning all this is a recognition of change. I should like to end by saying that six years ago when I stepped down as the chairman of the British-German bilateral Königswinter conference, a member of the German Parliament got up and attacked Britain’s attitude towards the EU, saying that we lacked vision and commitment. I said in reply, “Look, we started this European journey from very different places. We started it as the bankrupt victor; you started it as a country which had been disgraced, divided and occupied. We began at a different place”. What matters is where we are now, and the place where we are now is a recognition of interdependence in a globalised economy. We must not jeopardise that.

Lord Haskel: My Lords, last week I had the privilege of representing your Lordships’ European Sub-Committee B at the 15th European interplanetary space conference in Brussels. I was delighted to attend, as the space industry is one of the eight growth sectors identified by the Government for special support. Indeed, our contribution to the European Space Agency has recently been increased by 25%. How right we are.
	The priority of the European Space Agency is not necessarily to encourage space travel to Mars. It is to encourage growth here on earth. This has been done by helping to create new marketplaces, more particularly in Europe, using the satellites and equipment in space —markets that provide improved services to EU citizens through new communications platforms for the internet, TV, telephone and radio; that help agriculture and fishing with better weather forecasting and better understanding of climate change; and that use observations from space in cities and the countryside for better management of road, rail and air.
	You must be asking why I am telling you this. I put it to your Lordships that our membership of the European Space Agency is a microcosm—a miniature—of our membership of the European Union. The obvious economic benefits gained from our membership of the ESA reflect the economic benefits gained from our membership of the European Union. It illustrates the arguments put by the noble Lord, Lord Shipley, whom I congratulate on moving this debate. It also illustrates how wrong are the arguments of the noble Baroness, Lady Noakes, and the noble Lord, Lord Stoddart.
	The European Union is not a new institution. Times and circumstances change and so do institutions if they are to remain fit for purpose, creative and beneficial. You do not achieve this change by walking away, or even threatening to walk away. That is how you paint yourself into a corner. Obviously it is now dawning on the Government that that is exactly what they are doing. You change by building on what has gone before. You complete the single market by reviewing the rules, bringing them up to date and making them smarter, not by walking away.
	As many noble Lords have told us, including the noble Lord, Lord Wrigglesworth, in his maiden speech, this is not only the view of our large foreign investors in car-making, technology and nuclear industries, it is also the view of 85% of the EEF members, who said that they would vote to remain in the European Union if there were a referendum now. This is because people in business know that it takes months and years of hard work to build up the trust, confidence, connections and knowledge to sell and trade successfully in overseas markets. EEF members do not want to see their years of effort in Europe wasted by the incompetent and uncaring short-termism of some members of this Government. This is why, after listening to his members, the chief executive warned us not to gamble on our future in Europe. “The stakes are enormous”, he said,
	“it is naive to think that we can simply pull up the drawbridge and carry on as normal”,
	and do the business elsewhere. My noble friend Lord Giddens was also concerned about this.
	China has been mentioned as an alternative. The noble Lord, Lord Hannay, asked why Germany has been so successful there. The fact is that their Chancellor has been there some 25 times since the open-door policy was announced in 1978, to emphasise their strengths and commitment. This is not as an alternative to Europe, but in addition to it—and so it should be for us.
	It seems to me that, instead of surrendering our capability and strengths in the space industry for the sake of appeasing Eurosceptics, we too must take advantage of our strengths. Our companies, our people and our universities are full of new ideas and technologies for the space industry, as a result of our investment in the European Space Agency. We benefit from our participation and our membership fee. This is a model that works. I put it to the Minister that the same applies to our membership of the single market and the EU.

Lord Stevens of Ludgate: My Lords, we are here today, thanks to the noble Lord, Lord Shipley, to debate the economic impact of being a member of the EU. I also congratulate the noble Lord, Lord Wrigglesworth, on an excellent maiden speech. In addition, contrary to some comments that have been made, I agree with practically everything that the noble Baroness, Lady Noakes, said. She summed the situation up brilliantly, which is why my speech will be somewhat shorter than usual.
	No one could doubt that the impact has been of major importance. The European treaties are the UK’s supreme constitution, over and above our laws, as per the European Communities Act 1972. The UK’s cash contribution to the EU is second only to that of Germany. Since 1973, the UK has paid to the EU some £370 billion and received in return £180 billion—this to an organisation whose own auditors say that 90% of the EU’s entire budget has been materially affected in some way by fraud or unaccounted spending. If sending to the EU some £12 billion net in 2013 is perhaps not of major impact in relation to the total UK budget, the economic cost of regulation is. The European Commission itself puts the EU costs of regulation at £600 billion a year for all the members. Business for Britain, supported by more than 500 business leaders, has told us that since the 2010 general election, Brussels has handed down 3,600 new pieces of regulation or directives—some 13 million words—ranging from banning the union jack on packs of meat to changing the generic name of the tomato.
	Let us pause for a moment and look at Open Europe’s report on EU regulations that came out last Monday. It says that the top 100 EU regulations cost the UK economy some £27 billion a year and that the costs of regulation outweigh the benefits in impact assessments of a quarter of the 100 cases. Of course, as has been stated, were the UK to leave the EU, some of these regulations would need to be retained.
	The EU was sold to the British public as a free trade area. It has indeed brought trade barriers down, as has the WTO. Some 40% of our trade is with the EU—a declining proportion, partly because EU trade has slowed down since the 2008 collapse, but also because the share of the EU in global trade and outputs has been declining and will continue to do so, if for no other reason than the demographic problems of its ageing and declining population.
	As has been stated, we have a trade deficit with the EU of more than £80 billion a year, larger than our surplus with the rest of the world. It needs us more than we need it. As far as economic influence is concerned, the euro members can outvote us in any matter requiring a unanimous vote. As we all know, EU regulations apply to 100% of the UK economy, but our trade with the EU is less than 10% of the UK economy. Our trade with the rest of the world, in spite of these regulations, is growing much more rapidly than with the EU. How much more rapidly would it grow without EU regulation?
	I have not commented on unlimited immigration, handouts to illegal immigrants, inflated agricultural prices and many other matters, because time inhibits it.
	The original subject of this debate was “economic benefit”. That has changed to “economic impact”. It seems almost to have developed into a debate over “in” or “out”. We heard in Oral Questions today that the majority of the British public support some control of the press. I declare an interest as a former chairman of Express Newspapers. On this basis, the majority want a referendum on the UK’s membership of the EU: in or out. Is it not time that we had one?

Lord Soley: My Lords, I welcome the noble Lord, Lord Wrigglesworth, whom I well remember as a Member of Parliament and his struggle as to whether he should stay in the Labour Party or leave. He chose to leave and I chose to stay, although, like a number of us at that time, we toyed with the idea of murder or suicide instead. However, we got through that phase, which I think was beneficial to everyone.
	I particularly welcome the full, considered and convincing introduction to this debate made by the noble Lord, Lord Shipley. I shall not repeat all the arguments he made along economic lines but I should like to emphasise one that was picked up by the noble Lords, Lord Hannay and Lord Watson of Richmond, and my noble friend Lord Haskel. The amount of expenditure on science and technology beneficially made to us through the European Union is enormous, particularly in the university sector. We benefit far more than any other country in the European Union from that expenditure.
	Science, research and development will drive growth. We will not achieve growth with a low-income economy. We cannot go down that road. If you are to maintain that level of research and development expenditure, and come out of the European Union, you have to answer the question that I think was asked by the noble Lord, Lord Stoddart, and the noble Baroness, Lady Noakes: where does that money come from? It will not be replaced by the private sector or the public sector in Britain. Inevitably, that would impact on us. My noble friend Lord Haskel gave the classic example of the space industry. Although I have said it on a number of occasions in the House, it is not well known that Britain still has the second-largest and second most-advanced aerospace industry in the world. There is hardly a satellite going around this planet that does not have British instruments on it. Often, they are of major importance. A lot of that expenditure on research and development has come from the money that we have received from the European Union. People have a responsibility to answer that point.
	I also want to put this in a political context. I am very conscious that when people making economic decisions do not take into account the political circumstances, they often make mistakes. Politicians who make decisions without taking into account the economic world in which they operate can make very big mistakes. If you look back on Britain’s relationship with the evolving European Union, many people would say that we made very big mistakes in our political calculations. You can go back to the famous headline in the Daily Mail around 1908—I cannot remember exactly when—which said, “Fog in the Channel: Europe
	isolated”, or perhaps it was “Fog in the Channel: Continent isolated”. Either way, it said everything about a mindset.
	I often ask the question: Why are the British so diffident about Europe? One of the reasons is that we are an island nation. Another reason, which was alluded to a few moments ago, is that we have never been defeated and occupied. We are almost alone among the European states and certainly alone among the major states. We have always been the victor. If you ask continental Europeans about the importance of the European Union, often they will put first that it has maintained the peace. The majority of British people do not see it in that way; it does not have the same weight here. That is a very important factor in people’s attitudes to Europe.
	In the context of the balance between politics and economics, having had a view of ourselves as being separate and having won the two world wars, in the period after the Second World War we looked at where our market was going to be while the European Union was developing as the European Economic Community. Initially, we had the Commonwealth Party, which argued for the Commonwealth as the market, for which I had great support at the time. As an internationalist in that sense, I rather liked the idea. Having failed on that front, we turned to the European Free Trade Area, which we set up. Again, it did not work. People who are saying that we should come out of the European Union now should look at the long history of this issue and ask why we made those political judgments in the face of such dramatic political change.
	Enormous political change is again taking place in the world now. The United States will no longer be the dominant world power as it was after the Second World War. That does not mean that it will decline in importance, fail economically or whatever. I do not think that that is happening but the US will not have the same dominance that it had previously. In many respects, it is rather like Britain in the early 20th century when we had lost our total dominance of the world. People used to say that 95% of goods travelling around the world were in British ships. Now we say that about 88% of the advanced technology of the internet is driven by the United States. However, that is changing rapidly. India, China, Brazil and the newly emerging countries—perhaps to a lesser extent, Russia—are eating away at this, which means that we must change too.
	Finally, it is time for Britain to stop the half-in, half-out dance. We are doing ourselves enormous damage. My fear about the referendum—I do not support it and I am not a great fan of referendums at the best of times—is not that it will not be won. I am sure that it will be won, but my fear is that there will be a relatively low turnout. Those people who want to take Britain out will continue to fight on that front. There will be the same problem as there will be if we do not win the referendum convincingly in Scotland, although I hope that we will. People take heart, although often it is because people are not voting in the way that one hopes. I hope that the British people have the wit to see that the politics has changed dramatically and,
	along with it, the economics of the world. We had better face up to that and become a bit more wholehearted and less half-hearted. We are doing ourselves a lot of damage within the European community and in the wider world by appearing to be so negative.

Baroness Falkner of Margravine: My Lords, I, too, thank my noble friend Lord Shipley for having secured this debate. It is an important debate and it is an important time for our country to have these discussions. Before I move to the substance of my speech, I could not possibly not congratulate my noble friend Lord Wrigglesworth on his fabulous speech, which, as the noble Lord, Lord Giddens, said, was delivered with such verve and conviction. My acquaintanceship with my noble friend goes back to SDP days when he was one of the grandees and I was one of the workers. It is very nice to see him here on slightly more equal terms, which I have to say are to my benefit.
	This debate is hugely significant in the sense that, while most speakers have spoken from more or less the same hymn sheet, some speakers have not. Of course, it is important to mention the contribution made by the noble Baroness, Lady Noakes, as well as that of the noble Lords, Lord Stevens of Ludgate and Lord Stoddart of Swindon. These debates on the other side of the fence to most of us will be hugely significant as we move forward to cross swords over the referendum campaign. I was not surprised to hear what the noble Baroness, Lady Noakes, said. She quoted Professor Congdon and Professor Minford who, distinguished as they are, are also known to be very long-standing critics of EU membership. In a sense, it might have been more fruitful if we had heard from more authoritative and more impartial sources on the other side of the camp. I regret that we did not get that. However, the noble Lord, Lord Desai, illustrated ably why their analysis needs further scrutiny and I am sure, particularly since the paper by Professor Congdon is relatively recent, that research institutes will analyse his findings very seriously.
	The Department for Business, Innovation and Skills per capita calculation takes a longer-term look at those figures on the basis that:
	“EU countries trade twice as much with each other as they would do in the absence of the single market programme”.
	That of course was based on the OECD’s estimates.
	The noble Baroness, Lady Noakes, also made a point about EU jobs that are engaged in trade from the EU to the United Kingdom. I think she used the figure of 4 million jobs, rather than the widely accepted figure in terms of UK jobs relating to trade with the United Kingdom. There was a difference of 1 million on her side. I would argue that while we are talking about 3 million jobs that may be lost if we disengage from the European Union, the noble Baroness says that there would be 4 million jobs and that therefore the European Union would be loath to disengage from us, which would give us the benefits of non-tariff barriers, free trade and so on. Of course, 4 million jobs spread across 27 states with a population of 420 million
	is a very much smaller impact than the impact that it would have on a single country—that of the United Kingdom.
	I turn now to recent debates on the cost of welfare through inward immigration, because that has become the flavour of the time and it needs rebutting. There is clear evidence to show that EU migrants pay more in taxes than they receive in benefits and services here in the United Kingdom. The Department for Work and Pensions recently published figures for 2011. Of those receiving working-age benefits, it is true that 25% were from within the EU, but Poland, which had the highest figure of those receiving benefits, was in the seventh slot, behind Asia, Africa, the Middle East and several other countries. Of EU accession countries, only one figured in the top 20 of countries from which people claim benefits in the United Kingdom. That compares to the 10% of Britons who claim benefits in Germany alone, so it goes both ways and we must not allow this debate to run away. The idea that migrants from the accession countries and from the wider EU are coming here for some sort of benefit or health tourism needs to be looked at more carefully.
	The free movement of peoples is also enormously significant in terms of its impact for us in the United Kingdom. The Centre for Economics and Business Research estimates that if we curbed EU migration—mostly young people, in terms of demographics, who are coming into an ageing society and who will ameliorate the impact of the demographic changes of ageing here in significant proportions—it would cost our economy something like £60 billion, or 2% of GDP, per year by 2050 and increase public borrowing by something like 0.5%. Moreover, we also benefit from inward tourism from the EU. Some 19 million visits were conducted by EU citizens in 2012 and some £7 billion was spent here.
	To conclude, I come to the very important point made by the noble Lord, Lord Giddens, that this is not just a dry cost-benefit analysis, not just about how many pounds in and euros out. What matters to our trade and our economic position is not just money. What matters is the future of our young people, the status of our country internationally and the debt we owe succeeding generations if we do not take the right decisions in the forthcoming referendum.

Lord Liddle: My Lords, first I add my congratulations on behalf of the Opposition Front Bench to the noble Lord, Lord Wrigglesworth, and welcome him to the House. I have known him for the best part of four decades, I am afraid to say. For me, he has always been a man of solid principle, unfailing good humour and boundless resilience and it is good to see that those qualities are still much in evidence. When he first got into the House of Commons he was at one stage known as Roy Jenkins’s seat warmer, so that the great man could continue to linger a little longer over lunch before he took his seat in the Commons. I would say, on the basis of his performance in this House today, that he is going to be a Lords crowd puller.
	I also thank the noble Lord, Lord Shipley, for putting down this debate. He made a very comprehensive, well argued case for Europe, and I do not disagree with a word. We have heard many excellent speeches. It is a timely debate. No one has mentioned that today the Prime Minister is in Brussels at a European Council meeting which has, as one of its main purposes, the discussion of the digital economy, innovation and trade in services, so it is a very appropriate day to be debating the single market. I should like some assurance from the Government that they are taking this opportunity very seriously, because when one looks at the digital economy, economic estimates are that if we had a proper single market in digital this would add 4% to 5% to European GDP. Looking, for instance, at telephones, whereas the US and China have three or four major operators with a single set of rules for their whole economies, we still have hundreds of operators and 28 different rulebooks.
	Similarly, when one looks at internet commerce, there is enormous scope for expansion but we have to have common rules on online content and online shopping. If we are going to have online shopping we have to have rules on privacy and data protection, we have to deal with customer worries—a lot of people will not use the internet for shopping because they worry about making payments and their details being disclosed—and we have to have a copyright system for the digital age. Where do the Government stand on all this? It is a legitimate question.
	The Prime Minister has gone to Brussels today on another campaign to cut EU regulation. There is nothing wrong with trying to improve EU regulation, but surely what he should have been doing is emphasising the potential, for Britain and the rest of Europe, that real progress towards deepening the integration of the single market could make. Although it is always very nice to see the noble Lord, Lord Newby, on the Bench opposite, it would be so much better if we had a Conservative Minister there who could tell us where the Conservatives stand on the necessary sacrifices of sovereignty and the compromises that have to be made in the European Union if we are going to bring about that deepening of the single market. There is no point just saying, “Wouldn’t it be lovely if we had a digital single market?” Yes, it would be lovely if we had a digital single market, but we have to be prepared to compromise on sovereignty and negotiate. Are this Government really prepared to do that? In fact, what we get from Conservative Ministers is a skulking away from these issues as they try to sleepwalk out of the European Union.
	In the package that the Prime Minister has taken to Brussels today there is a document called Cut EU Red Tape: Report from the Business Taskforce, put together by a very distinguished group of businesspeople with a lot of good ideas about improving regulation. We on this side of the House fully support improved regulation, but let us remember that it is much better to have one European rulebook if you are a business operating inside the European Union, rather than 28 separate rulebooks. It would be much more costly to have to deal with that situation.
	The document also raises a lot of questions relevant to social Europe; the social side of the single market. It raises questions about the proposed pregnant workers directive, the posting of workers directive, makes claims about inflexible and unclear rules on working time, raises questions about the agency workers directive and the acquired rights directive—a long litany of complaints about social Europe.
	I ask the noble Lord, Lord Newby directly: have the Liberal Democrats signed up for an assault on social Europe or have they not? Where do they stand on this list of amendments to social Europe proposed in the document that David Cameron is taking to Brussels today? Do we have another potential Beecroft here? Have Vince Cable and Nick Clegg agreed to these changes on social Europe? On this side of the House, we would like to know.
	Of course, all European legislation needs modernisation, but can we hear from the Government that if we have a single market it has to have some social underpinning? In social terms, we are the most lightly regulated country in the OECD—more lightly regulated than the United States. No one who argues for the dismantling of social Europe explains why the Germans and the Swedes can so successfully compete in world markets, facing the same social burdens that we do. Why is our business uniquely sensitive to those questions. In my view, most good corporate practice supports a high level of social standards. A single market has to have social, environmental and consumer standards dimensions.
	It is quite possible that the Prime Minister today will get himself into a silly spat with the French when he should be working out with the French how we can use the research money of the European Union to develop a proper industrial strategy for Europe.
	The single market is a vital UK national interest, as many Members have said, but opponents like to think that we can have our cake and eat it, that we can somehow leave Europe but retain access to the single market, and that we have a strong bargaining position because they export more to us than we to them. That is almost certainly rubbish. For instance, take the car industry, which is one of our most successful export areas. We would face a tariff of 9.8% if we were not part of the single market. Still, more than 50% of the car production in the UK goes to Europe. I say to the noble Baroness, Lady Noakes, that the relevant point about bargaining power is that only 2.5% of European GDP is exported to Britain, whereas 14% of our GDP is exported to the rest of Europe, so it is not as she presented it.
	The single market is essential. I welcome this debate. As the noble Lord, Lord Shipley, said, there can be no ifs or buts about it. As the noble Lord, Lord Giddens, said, our membership of the EU is the biggest issue that we have faced in this country since the Second World War. As the noble Lord, Lord Watson, said, we have to make the case very strongly that we are better off together.

Lord Newby: My Lords, I thank all noble Lords for their contributions to the debate today and, in particular, the noble Lord, Lord Shipley, for initiating it. It is a huge pleasure to be able to congratulate my noble friend Lord Wrigglesworth on his maiden speech. As his speech demonstrated, he speaks with great authority about the economy of the north-east, and with great authority more generally. The noble Lord, Lord Giddens, described his speech as witty, meaty and suave. It struck me that these are fitting epithets for him as a whole.

Lord Giddens: My Lords, I do not want to damage the life of the noble Lord in the House of Lords, because the word “suave” might chase him forever, but it was intended as a compliment, so perhaps that subject should be dropped—in a suave sort of way.

Lord Newby: I took it as a compliment.
	I first met my noble friend 32 years ago, when I went to work in the Whips Office of the SDP. Like my noble friend Lady Falkner, I was one of the workers and he was a grandee. Therefore, it gives me particular pleasure now to be his Whip and to make sure that he is in every respect a model Member of your Lordships’ House—as I am sure he will be.
	The Government are clear that membership of the EU is in the UK’s interest. The EU helps to advance UK national interests, influence and values. It provides freedom for British people to live, work, study and retire in Europe, and supports UK jobs, prosperity and growth through increased trade, both inside the single market and through free trade agreements.
	The principal economic benefits of our membership of the European Union can be categorised under the headings of trade through our access to the single market, encouraging investment and promoting competition, thus driving down prices for British consumers. I shall deal with each of those three principal areas in turn.
	The UK’s EU membership support jobs, prosperity and growth in this country through increased trade. Our membership gives UK companies access to the world’s largest single market, with a GDP of about £11 trillion and 500 million consumers, without customs or tariffs. Free trade agreements through the EU lower trade barriers and increase access to markets. If the EU completed all trade deals currently under negotiation, EU GDP could be increased by about £275 billion. In particular, independent analysis commissioned by the Government has found that the net benefits to the UK of the EU-US free trade agreement currently under negotiation could add up to 0.35% to the UK’s economy. I absolutely agree with my noble friend Lord Watson that our ability to conclude such free trade agreements in a world where the WTO is a declining influence is immeasurably enhanced by being part of the EU. The idea that you can go into such negotiations with the same strength as a single country is surely completely mistaken.
	Europe remains the main destination for UK exporters, with just over 50% of our goods exports destined for Europe in 2012. That has real benefits for UK businesses: 80% of businesses believe that the single market delivers
	concrete benefits to them and the Department for Business, Innovation and Skills forecasts that the EU will remain the UK’s most important market for at least the next 10 to 20 years. That strong trade relationship due to our membership delivers clear employment benefits, with one in 10 UK jobs to some degree dependent on trade with the EU.
	The CBI study and others which have been quoted show truly remarkable levels of support for continuing EU membership. Underneath the fact that 80% of companies, broadly speaking, say that they wish us to remain in the EU, it is interesting that 47%—almost half—said that without EU membership, they believe that it would be more difficult to hire skilled workers. It is not just access to the market but access to workers.
	I say two things about trading elsewhere to the noble Baroness, Lady Noakes. First, as several noble Lords have said, there is no trade-off between trading to the EU and to the rest of the world. The more a company trades in one part of the world, the more likely it is to be good at trading somewhere else. Secondly, we want many more companies to start trading, and the logical place for them to start, particularly if they are small, is with the EU. For a small company thinking about foreign trade, the prospect of doing it in Brazil, China and India is almost a bankrupting prospect. You do not have the time. You do not have the money. You do not have the knowledge to do it. The only logical place to start is the EU. That will continue to be the case.
	Secondly, being part of the single market helps UK businesses to attract inward investment from both inside and outside Europe, enabling them to operate on a more efficient and global scale. The UK is the top destination in Europe for inward investment, attracting 21% of all foreign direct investment projects in Europe last year.
	Our access to the single market is a key motivation for foreign investment in the UK economy, with half of all foreign investors in 2010 citing access to the single market, among other factors, as a key reason for investing in the UK. A number of noble Lords have dwelt on this point. The noble Lord, Lord Shipley, made the point that Nissan, which provides 6,000 jobs in his region, is there because of our EU membership. If we were to leave, the number of jobs would shrink.
	The City of London Corporation, in the representation made to us which the noble Lord quoted from, said that many EU European banks locate in London to access the markets in which London has accrued specialities. Many non-UK EU firms choose to list on the London Stock Exchange in order to access the capital on offer there, directly channelling capital to European businesses from London. If we were not members of the EU, the idea that the City would be able to continue sailing serenely along with no threat from competitor centres in the EU seems implausible.
	The single market also encourages competition and innovation across the EU, bringing down prices for consumers and increasing productivity in the UK. We are clear, however, that the EU could do better to become more competitive to deliver further economic benefits. That is in the interests not just of the UK but of all member states. The EU must become more
	competitive if we are to continue to improve the standard of living which Europeans currently enjoy, firstly by completing the single market in services, particularly in the digital and energy sectors. I give the noble Lord, Lord Liddle, an absolute assurance that the Government are committed to promoting the single market. It has been a centrepiece of our engagement with the EU. When my colleague in another place, Ed Davey, was at BIS he set up a group of like-minded countries, which eventually involved a majority of EU member states, to promote the single market in an effective way. It shows, incidentally, how the UK can take a lead in the EU even though we are not in the eurozone area. The completion of the single market is a central goal of the Government.
	The second important role in making the EU more competitive revolves around agreeing the international trade agreements to which I have already referred. Finally, we are committed to cutting red tape to allow the engines of growth in the eurozone and across the EU the space that they need to flourish.
	Completing the single market by removing all barriers to trade is estimated to increase UK GDP by about 7% and prices would fall by approximately 5% due to increased competition. In this tough economic climate, this would obviously provide a real boost if we could achieve it for UK businesses and consumers.
	On the international free trade agreements with both advanced and emerging economies, progress continues to be made. The landmark deal reached between the EU and Canada, to which my noble friends Lord Maclennan and Lord Watson of Richmond referred, will benefit the UK economy and businesses by over £1.3 billion a year. As I have already said, the potential deal with the US would dwarf that.
	Cutting red tape from the EU is crucial to allow small businesses to start up and then expand. Last week, six senior business leaders presented a report to the Prime Minister on reducing the burden of EU regulation; the noble Lord, Lord Liddle, referred to this. Their findings are based on research carried out across Europe. They have found that there is potential to save EU businesses billions of pounds by improving the regulatory environment. Their aim is not to abandon all regulation; they want to reduce the burden on small and medium-sized firms who create the vast majority of new jobs in Europe, and employ two-thirds of the workforce. The Government support their views, and are committed to ensuring that EU regulation does not hold UK businesses back.
	The noble Lord, Lord Liddle, referred to a number of proposals in this report. The one which seems to be a classic of the kind of change we need, and which should be achievable, is the proposal to press for an urgent increase in the public procurement thresholds which significantly hold back small businesses in bidding for public sector work.
	As the noble Lord, Lord Shipley, pointed out, these views are increasingly being accepted across the EU. The days when greater harmonisation was almost seen as an article of faith by member states are now over. We are in a strong position to take a lead in making EU regulation proportionate and growth promoting.
	The noble Lord, Lord Liddle, asked whether the Government were speaking with one voice in terms of the single market and in terms of the report to which he and I have both referred. I can assure the noble Lord that the Government are speaking with one voice. He described the Government’s attitude as an assault on social Europe. This is a grotesque caricature of both the Government’s position and the proposals in the report. It does not reflect the Government’s attitude in any respect.
	One question that is commonly asked or implied is whether the UK, given its semi-detached nature, is able to make progress with the kind of reform agenda to which I have been referring. We believe that we are and that we can. For example, we have secured the first ever exemption of micro-businesses from new EU proposals from the start of this year. We have also secured agreement on a single European patent after 23 years of EU negotiation, with the new patent court based in London for key pharmaceutical and life sciences sectors. This will be an important engine of growth for the UK’s R&D sector.
	We have persuaded the European Commission to review the body of EU legislation to identify existing obligations from which micro-businesses could be exempted. Finally, we have delivered the first ever real-terms cut in the EU’s seven-year budget while protecting the UK’s rebate.
	We had an interesting discussion, principally between the noble Baroness, Baroness Noakes, and the noble Lord, Lord Desai, about—

Lord Hannay of Chiswick: I know that time is short, but would the noble Lord not agree that the word “semi-detached” is an extremely unfortunate one to apply to the Government’s policy? We are talking about instances of variable geometry which have existed in the European Union since the 1980s and which are still continuing to develop. Would it not be better to expunge the word “semi-detached”?

Lord Newby: My Lords, I use the word “semi-detached” because that is in the common parlance. I do not believe that it is an accurate reflection of the approach that the Government are taking. It is only reasonable to deal with the criticism of the Government head on, by explaining that our current position enables us to exert influence and to make significant positive progress.
	I was referring to the interchange between the noble Baroness, Lady Noakes, and the noble Lord, Lord Desai, about the quantitative costs of EU membership. The noble Lord, Lord Desai, sensibly in my view, suggested that this was an extremely difficult area, not least because it is impossible to state a compelling counterfactual. Many of the rules and regulations against which costs are attached would almost certainly be required in some form or another were we not members of the EU. To count potential costs of such regulations on the assumption that they would not exist if we were out seems, again, to be pretty implausible. Equally, as other noble Lords have said, the suggestion that we could get a better deal from Norway and Switzerland if we were out seems not to be borne out
	by any logic. Given the circumstances of a divorce, which would be almost certainly politically pretty unpleasant, it is difficult to see how we would find ourselves in such a better position.
	The noble Baroness, Lady Donaghy, talked about the role of national parliaments and the importance of increasing that role. The Government strongly agree with that. We are working with EU partners to increase the role of national parliaments. We welcome moves by both Houses to use the tools that they currently have to hold EU decision-makers to account more effectively. We want to consider possibly extending the scope of the “yellow card” system by introducing a red card. We absolutely agree that getting greater national engagement with this Parliament is strongly to be recommended. In saying that, I of course commend the work that your Lordships’ House already does through its European Union Committee and its sub-committee.
	The noble Lord, Lord Giddens, asked me a specific question about the debate on the EU and how to promote it within the UK. Apart from the normal business, as it were, of making major speeches on the subject, which both the Prime Minister and Deputy Prime Minister have done in recent months, the Government have initiated a balance of competences review that seeks to engage with a wide range of people—not just think tanks, academics, businesses and Parliament but also the public—to produce as far as we can an analysis of the effect and effectiveness of the current powers and competences of the EU, with a view to deepening the public understanding of the nature of EU membership and reform. This is a difficult business, as the noble Lord will be aware, because we are doing it against the background of a media that find it literally impossible to treat a story about the EU on its merits. Still, the balance of competencies review is a significant process and I encourage all noble Lords with interests in some of these areas to engage with it.
	A number of noble Lords, such as the noble Lord, Lord Haskel, mentioned the European Space Agency. This is, as it were, a classic example of where working together within the EU serves our interest, and where trying to do it on our own would almost certainly have ceased because we simply do not have the resources to do so. As we look across the piece, we find many similar examples, as many noble Lords have exemplified in their speeches today.
	To conclude, the Government believe that membership of the European Union is in our national interest and that there are significant economic benefits of our membership, from the single market through to trade, investment and competition. We are advancing and protecting the UK’s national interest in the European Union and will continue to do so, ensuring that our voice is heard and our interests are protected in order to promote growth and prosperity, which is the Government’s central purpose.

Lord Shipley: My Lords, I am grateful to the Minister for his reply and to all those Members of the House who have spoken in the debate. Mention was made of
	Roy Jenkins. I am reminded that in 1975, when he was Home Secretary, Roy Jenkins announced when the referendum had been won that it had put the uncertainty behind us. It did for a while, but obviously there is still a debate to be had. On the balance of today’s contributions, those who are in support of continued membership of the EU have the day, but there will inevitably be a continuing debate on that. I thank noble Lords for their contributions.
	Motion agreed.

High Speed 2
	 — 
	Motion to Take Note

Moved by Lord Greaves
	To move that this House takes note of the expected impact of High Speed 2.

Lord Greaves: My Lords, High Speed 2 is the proposal for a new fast mainline railway between London and Birmingham and onwards to the north of England, with a line to Manchester and the west coast main line, and another to South Yorkshire and West Yorkshire. In my view it is a sensible, necessary, long overdue and economically and socially beneficial proposal. It will herald a new era for railways in Britain, and it will form a vital part of bringing together the different parts of England and closing the regional divide. In moving this Motion, I am reaffirming the longstanding Liberal Democrat support for this new line.
	Why is it needed? There has been a lot of talk about how fast people want to go, and it has been suggested that HS2 is really all to do with people wanting to go quicker. That is not the case. It is now becoming very clear that the reasons for the line are what are now being referred to, slightly opaquely, as “capacity” and “connectivity”. As far as capacity is concerned, everyone knows that the west coast main line in its present form is already virtually full. For example, it is proving very difficult, in fact almost impossible, to find paths for the proposed new services that Virgin wants to run between Blackpool and London. The east coast main line is perhaps in not quite so congested a state—although it seems pretty full to those of us who use it—but the combination of intercity traffic, commuter traffic, particularly at the southern end, local services and freight services means that the line is pretty full.
	People keep saying, “Well, we can tweak the network a bit more and get a bit more capacity out of it; we can improve the situation at Peterborough and provide a freight diversionary line at Lincoln”, and so on, but there is a limit to how far that kind of tweaking can solve the problem. In particular, there is a huge freight potential on both the east and west coast main lines to move a lot more freight on to these main railway lines from the motorways of this country which is simply not possible to achieve at the moment. No doubt the noble Lord, Lord Berkeley, will talk more about this when he speaks.
	Is HS2, as proposed, in the right place? I congratulate the Government, in a sense, on their bravery in putting it through the Chilterns, but I suppose that that was originally the decision of the previous Government. However, I want to take an overall view. The network that we have been bequeathed by the Victorian railway builders, particularly the east and west coast main lines, does not actually connect or even go through the main conurbations or the great regional centres. Birmingham is served by a very unsatisfactory loop, and anyone who goes on those services to Birmingham knows how they trundle when they go through the Black Country. Manchester is on a branch line. Derby, Leicester and Nottingham are served by neither the east or west coast main lines, and neither is Sheffield. Leeds is on a branch line. North of London, you have to go as far as Newcastle before you get to a major regional centre that is actually on either of the two main lines. They then of course go on to serve the major Scottish cities of Glasgow and Edinburgh.
	HS2’s proposed routes serve all these major conurbations as far north as Lancashire and Yorkshire, and will allow through trains extending beyond HS2 to go on to Newcastle in the north-east, to go on to Preston in Lancashire and to go on to Scotland.
	What are the alternatives? We are told by some of the opponents that we can upgrade the east and west coast main lines—but we have been there before. We know that the disruption that it would cause is enormous, and my noble friend Lord Bradshaw may talk further about that. The noble Lord, Lord Faulkner of Worcester, has an upcoming Oral Question asking the Government what their estimate is of the cost of upgrading those two routes. We might get an answer today or next week; I do not know. However, we do know that the previous west coast main line upgrade, which was partial, inadequate and incredibly disruptive, cost over £9 billion.
	If we decided to look at a serious upgrade of the east and west coast main lines throughout England, perhaps even to Scotland—a sort of what in my part of the world might be called a “rack o’th’eye” estimate; I will translate that for Hansard later—it might come out at about £25 billion for the two. It is certainly not going to be less than that, and that is getting on for the present estimated costs of HS2.
	Of course there have been lots of estimates for the cost of HS2. We have even had some thoroughly discredited and fairly disreputable estimates which have got a lot of publicity from a partisan press. The Institute of Economic Affairs suggested that it would cost £70 billion by including a lot of schemes that are already going to take place and some which, at the moment, are not on the drawing board at all. The government estimate of the cost at the moment is a little over £30 billion, plus £10 billion to £12 billion which has been added on at the Treasury’s insistence for contingencies. That might be a very sensible thing to do, but at the moment those are just contingencies. The estimated cost at the moment is £30 billion to £32 billion.
	Then, we are told that we will have to add the cost of trains. Andrew Tyrie, chairman of the Treasury Select Committee, seems to have discovered that if you
	build a new railway line you have to have trains to run on it. That is an amazing revelation from his committee. However, if we are not just going to build HS2 but going to try and upgrade the two main lines to increase their capacity substantially, we will need more trains for those as well. So, on the point about adding on the cost of new trains, we are going to need the trains either way.
	We can compare the estimated cost of HS2 with the cost of some schemes where we know the cost. Thameslink and Crossrail together have cost over £20 billion. The London Assembly transport committee has been looking at the proposals for Crossrail 2, and its proposals for Crossrail 2 would cost £12 billion. The Mayor of London wants a new Thames estuary airport in Kent. I suppose that it is a “rack o’th’eye” estimate at this moment but, nevertheless, it is suggested that that might cost £50 billion—the same as people say HS2 might cost with all its trains. It seems that these kinds of admittedly eye-watering sums are okay if they are about London and the immediate south-east, but if it is about the rest of the country—if it is about the north of the country and the East Midlands and the West Midlands—then we are told that it is unacceptable. I suggest that some of those who have what the Secretary of State, Patrick McLoughlin, describes as a London-centric view of these matters, should get out a bit more and come to the north of England and the Midlands and just find out why we need as much investment as comes in London and the south-east. We are not asking for as much as there is in London and the south-east in every other English region; we are saying, “Let’s share it all out, but at least let’s have it on the same basis as London”.
	Then we are told that we cannot afford this new railway line in a time of austerity. This is often said by the people who are complaining that the whole process will take far too long. If we are still in a state of austerity in 10, 15 or 20 years’ time, “God help this country” is all I can say. Surely we are planning now for the sunlit uplands ahead. Maybe the Opposition do not agree that we are going to have sunlit uplands with the present Government, but perhaps they think that they will get in and we will have sunlit uplands of a different colour. That is fine, but surely we are not in austerity for the next 20 years.
	Who are the opponents? They are people who are directly affected, and I do not blame them at all for campaigning about the effect it might have on their village or their property or where they live. That is fair enough. Then, we have the road lobby. They are not very prominent in the campaigns but they are behind it all, and they are behind a lot of the pressure groups that are campaigning. They do not want to spend less money. They just want it spent on roads instead of railways.
	We have the right-wing economic pressure groups: the Institute of Economic Affairs and the Institute of Directors. Then we have the London-based vested interests. The IEA added on the cost of Crossrail 2 as part of the HS2 project—that is how it got to £70 billion. But then the Mayor of London says, “Don’t spend it on HS2, spend it on Crossrail 2
	instead”. You can take either of those points of view but it seems to me that the two projects are quite separate.
	We have the London-based media, which seem to have swallowed a lot of this nonsense which is talked, and we have what I consider to be the disgracefully partisan activities of the BBC on this particular issue. I say to the Conservative Party: many of the bodies that are campaigning against this are part of the conservative base of this country. I congratulate the Government, the Conservative Party, the Prime Minister and the Secretary of State on resisting this lobbying from people who would normally be much of their base, and long may they continue to do so.
	Then we are told by people all over the country who are enviously eyeing what is a huge sum of money, “Let’s spend it instead on my pet little local scheme”. I even have one or two people in my part of the world saying, “Why can’t we build the Colne-Skipton railway line with a bit of it?”, and we have people in Skelmersdale saying, “We want a railway line and a station please. Why can’t we have a bit of it?”.
	More significantly, there are people in places like the south-west who have to suffer a six-hour rail journey from London to Penzance, for example, and I think that they have a very serious point—that they are being missed out in rail investment in this country. I say to them, “If you think that scrapping HS2 will suddenly result in a transfer of all the money to that scheme and to all the other schemes, you are living in cloud cuckoo land”. We are talking here about national infrastructure between the major conurbations of this country and about a very important rebalancing of regional investment and regional economies.
	The Independent Transport Commission has taken quite a balanced view of the proposals. It says that HS2 will act as a catalyst for regional development if it is accompanied by smaller schemes to improve local transport links. Those smaller schemes are needed anyway. Anybody who travels by train in Lancashire or Yorkshire knows that the amount of underinvestment simply cannot continue. The ITC also says that there is a need for the Government to explain these things, and to define what it calls the,
	“spatial problems it is supposed to address”.
	It is quite clear that so long as HS2 is seen as a comprehensive scheme for improving the transport infrastructure of this country, it can do the job.
	We also have the KPMG report—I do not have the time to go into it in detail at all—which suggests that there is a £15 billion bonus for the economy. I never know how they work these things out. I have looked at the report and I still do not know how they have worked that out. I think there is a lot of voodoo when people make forecasts like this. However, it says that Cambridge will suffer because we are building HS2. I do not believe it. Even more, it says that Lancaster will suffer. Lancaster is going to get a better, faster rail service to the south and an hour off its journeys to London. How on earth can Lancaster suffer because of that?
	Then we are told that the UK is too tiny for high-speed rail—and yet the distance between Paris and Brussels, which I think is the most heavily used
	high-speed line in Europe, is the same as the distance from London to Manchester and to Leeds. The distances between Paris and Strasbourg, and Madrid and Barcelona, are the same as the distances between London and Edinburgh and Glasgow. People will say that they are not going that far. I would say that the Government have got to be a bit bolder and start to say that HS2 has to be seen as the start. Perhaps it is past the lifetime of many of us here, but it has to be a vision for the future of a high-speed network throughout England and this island. Let the Government keep their nerve. Let us promote the vision, and let the Government accept my personal challenge that in my lifetime I can travel on a high-speed train from London to Leeds or to Manchester—and preferably in that direction.

Lord Faulkner of Worcester: My Lords, we are all indebted to the noble Lord, Lord Greaves, for giving us the opportunity to debate this really important issue. I congratulate him on the way that he successfully corrected some of the more absurd misconceptions about High Speed 2 which its opponents are attempting to put about.
	First, though, I should like to welcome the noble Baroness, Lady Kramer, to the Dispatch Box for her first debate in the Chamber. Hers is a promotion much deserved and we look forward to her speech greatly.
	The case for High Speed 2 is not primarily about the length of time that it takes to travel from London to Birmingham, although it is obvious that if we build a new railway, it should be built to 21st-century standards using technology that is tried and tested throughout Europe and Asia, rather than that of the Victorian age, and that means high speeds and shorter journey times. No, this debate is about something much more important: it is about what sort of transport infrastructure we are to bequeath to our children and grandchildren. We could go back to the thinking of the 1960s, 1970s and 1980s, when it was assumed that private motoring and heavy lorries would reign supreme. The transport imperative then was to build motorways on a predict-and-provide basis to serve them. The railways at that time were expected to decline gracefully, with many more lines being closed and services replaced by buses, passengers being discouraged by ever higher fares, and the rail freight business being largely abolished except for heavy-haul bulk loads and some container traffic.
	However, the British public were not prepared to see their railways decline and die, and by July 2001 the distinguished City correspondent Christopher Fildes was able to write in the Spectator:
	“Railways are a growth industry. Their most sustained attempts to drive away their customers have not succeeded”.
	Let us look at what has happened since then. In July this year, Network Rail published a report, Better Connections—Options for the Integration of High Speed. Let me quote one or two of its findings. First, it says:
	“Over the last decade the number of journeys made by rail has increased by almost 50% … But demand is still increasing. By 2020 another 400 million rail journeys will be made every year”.
	Indeed, there are a million more trains running each year, while the busiest stations individually handle more passengers than Heathrow Airport. Network
	Rail makes the point, as the noble Lord, Lord Greaves, did, that it has done its best to make the best use of its remaining capacity and squeezed every last incremental change out of what it has. To quote again from its report:
	“As demand continues to grow, this becomes harder and in some places impossible ... parts of the existing network will be unable to accommodate the forecast demand leading to significant overcrowding; in the peak, passengers may not even be able to board a train on some routes. Further, there will be no opportunity to accommodate the expected levels of increased freight traffic on the network”.
	There you have the essential case for building High Speed 2—not as a separate line, physically and operationally away from the current railway, but as a crucial part of a reshaped and improved national network.
	Some of those opposed to High Speed 2 argue that the money it will cost would be better spent on upgrading the present network and in trying to add capacity piecemeal to the west coast and east coast main lines. To add to the point made by the noble Lord, Lord Greaves, let me remind those opponents that the last time we upgraded the west coast main line it was supposed to take six years, cost £2 billion and deliver 140 miles per hour trains. What actually happened was that it took nine years, cost almost £10 billion, and we still have 125 miles per hour trains, with unimaginable disruption of existing services in the process, with endless closures and bus substitutions at weekends, and sometimes longer. Does anyone believe that more than a fraction of the funds allocated to High Speed 2 would ever find their way to funding new investment on the existing network if High Speed 2 were to be abandoned?
	Let us be clear: many of those arguing against High Speed 2 have no interest in growing the railway. The author of the Institute of Economic Affairs’ pathetic publication on HS2 makes clear his preference for an investment in roadbuilding—a transport policy which is 20 years out of date—and rubbishes the construction of the Jubilee Line and High Speed 1. It is inconceivable that London could function now without the Jubilee Line and the success of High Speed 1 is also clear. The economics consultancy Volterra produced a report in 2009 showing that the benefit to the UK economy of High Speed 1 over 60 years is estimated at £17.6 billion, plus a series of development, trading, housing and transport benefits.
	I have no doubt that the benefits of High Speed 2 will be even greater. Looking just at the jobs which will be created in the life of the project, Albion Economics, working for Greengauge 21, estimates the total job years to be almost 890,000—the equivalent of creating 89,000 full-time jobs. We have to recognise that the future of inland transport in Britain belongs to high-speed rail and in having a world-class transport system that brings Scotland, north England, the Midlands and the south closer together; that drives opportunity and economic growth; and that makes sound environmental sense too. After the success of High Speed 1, it is time for the whole of Britain and for your Lordships to embrace High Speed 2.

Lord Mandelson: My Lords, I strongly welcome this debate and congratulate the noble Lord, Lord Greaves. Like my noble friend who has just spoken, I have been an ardent pro-railway supporter all my adult life but it is precisely for that reason that I do not support HS2, because its sheer cost will suck the very lifeblood out of the rest of the country’s rail system.
	Originally in government, I, along with my colleagues, took the default position in favour of anything with an engine at its beginning, a guard’s van at the back and a lot of sleek carriages planned in between. However, I think that the Labour Front Bench is now right to have become more sceptical of the project. I am not going to dwell on how we reached that decision as a government but, frankly, there was too much of the argument that if everyone else has a high-speed train we should have one too—regardless of need, costs or alternatives. As a party, to be frank, we did not feel like being trumped by the zeal of the then Opposition’s support for the high-speed train. If anything, we wanted to upstage them.
	Since then, I have had a lot of time to think about this decision and to face the fact that no empirical case has been established for HS2, despite repeated attempts. The so- called business case, when the original justification for HS2 was all about speed, duly collapsed under scrutiny when it was discovered that in real life people actually work on trains, and sometimes even better than when they are in the office. Now the whole justification has shifted to assumptions about increased overall capacity, reduced crowding and the economic benefits to a handful of the nation’s cities—none of which assumptions, I might say, have been authoritatively quantified or verified, academically or otherwise. They all depend on forward projections of passenger loads which are uncertain, famously unreliable and greatly affected by the future price of tickets and elasticity of demand.
	What has been forgotten in all this debate is that in 2006 the then Labour Government asked Rod Eddington to undertake one of the most comprehensive studies ever of transport in the UK. That study, after a great deal of very thorough examination, firmly rejected HS2. Eddington concluded that Britain’s transport infrastructure needs would be much better met by a wide range of incremental improvements rather than a few high-profile extravagances. He ended with one very important point of wisdom:
	“The risk is that transport policy can become the pursuit of icons”.
	I fear that HS2 has become precisely that—a political trophy project, justified, on flimsy evidence, as being about modernity and prosperity, with, I might say, a lot of pressure being put on those conducting the cost-benefit analysis to come up with the answer that Ministers want.
	Even so, I would be prepared to put up with a lot of the uncertainties of the case if I thought that HS2 stood a reasonable chance of helping to rebalance the UK economy, lifting regional growth and creating jobs outside London and the south-east, but there is absolutely no conclusive evidence that any such things will happen. It might give some short-term boost to
	those cities on the line of the route but, equally, the easier you make it to get to London, the more people are likely to end up working and living in London. The readier the access to the facilities provided in the capital, the greater the likelihood that facilities in provincial cities will be undermined.
	It is not surprising that KPMG, on a closer examination of its research—as the BBC did last week—found some very patchy results indeed for the benefits of HS2 for the regions. More places stand to lose than gain from HS2. That is hardly surprising. Indeed, £50 billion spent on HS2 is £50 billion—or anything like it, for that matter—that will not be spent on upgrading the east coast main line, which serves Humberside, Teesside and the north-east, and on lines to Bristol and the south-west or to East Anglia. Importantly, it will not be spent on the links between cities outside London. This is something on which we need to focus.
	Having represented a constituency in the north, and now having the privilege to serve as the high steward of Kingston upon Hull, I know the difficulties that people have in using public transport not just between conurbations outside London but into and out of any northern city, and in particular in getting to a job within any extended travel-to-work area outside London when depending on public transport. There are literally dozens of rail and public transport projects urgently needed across the country that would make a significant economic and social impact. All these and more could be extracted for the price tag of HS2.
	I will say one last word on the capacity arguments that, it is claimed, will be magically solved by HS2. Rail demand may increase substantially or it may not. However, we know that if HS2 goes ahead, the economic case put forward—

Lord Lea of Crondall: My Lords—

Lord Mandelson: I would like to continue, but I will give way to the noble Lord.

Lord Lea of Crondall: My Lords, it is a question of clarification of what the noble Lord has just said. Does he think it a normal part of cost-benefit analysis on a project to say that you count against it? For example, can you say that if it does not go to Cambridge that is a cost to the project? Is that the noble Lord’s view on how cost-benefit analysis is normally done?

Lord Mandelson: Yes, of course it is part of it. However, my point is that the Government’s own economic case, if HS2 goes ahead, has made clear that this will involve nearly £8 billion worth of cuts to existing intercity services. That means, for example, that Coventry’s services to London will be cut from three to two per hour, Stoke’s from two to one per hour and Stockport’s from three to one per hour. All Wilmslow’s intercity services to London will be axed, and journey times from Oxenholme, Penrith and Carlisle to London will be lengthened. So much for the capacity case for HS2. If it goes ahead, we will see a shrinking of the rail network in this country, and that should be the very last thing that pro-rail supporters in this House should want to see.

Lord Popat: My Lords, I remind the House that this is a time-limited debate of six minutes maximum without any interruptions.

Lord Rodgers of Quarry Bank: My Lords, I, too, welcome this debate, carefully chosen by my noble friend Lord Greaves. There has been too little serious and sustained discussion, pro and anti, in this House of the project launched in the House of Commons by the then Secretary of State for Transport, Geoff Hoon, nearly five years ago. At that time, on 15 January 2009, there was only one modest paragraph about High Speed 2 out of 25 in a Statement on transport policy. Within little more than a year, the noble Lord, Lord Adonis, seized the opportunity with enthusiasm to publish the White Paper High Speed Rail Cm 7827.However, I am not convinced about the priority of High Speed 2 within the railway system and I am sceptical about benefits. In this respect, I agree with the remarks made by the noble Lord, Lord Mandelson. I am, however, an agnostic, and many agnostics want to believe. I hope that my noble friend will be persuasive this afternoon.
	With the initial momentum of the project, it was said—or so it seemed—that the chief merit was to reach Birmingham from London half an hour faster. Not everyone was sure that this was a recommendation, but, by definition, a high-speed train meant going faster and getting somewhere sooner. The relevant paragraph of the January 2009 Statement referred only to faster journeys, but by the publication of the March 2010 White Paper by Gordon Brown and Andrew Adonis, there had been a major shift of emphasis from glamorous speed to workaday capacity within the railway system; this has since become the dominant theme.
	It is now approaching 40 years since I became Secretary of State for Transport. The 1970s was the most depressing era for the railways. It was often said that my civil servants were anti-railway, but that was not the case generally. Passenger miles had dropped steadily since 1945 and flattened out for a decade, which was bad for the morale of those who cared about the railways. November 1976 was also the time of the visitation of the IMF, from which followed deep cuts in public spending, including transport. There was no prospect of taking any new initiative. As far as I could, I continued to introduce the HST Intercity 125, which was then a high-speed train, to improve the existing urban network and to encourage light railways. I also saved the Tyneside Metro when the Treasury was about to axe it. Then, rather to my surprise, in the mid-1990s, the passenger miles began to grow, and this growth has continued. I recognise the trend, and it is right to provide additional capacity. I also recognise and welcome faster trains on the existing network—or, as we are now required to call it, the classic network.
	In the latest Department for Transport glossy, one of the virtues is connectivity—a word I cannot find in my Oxford Dictionary. The boast is that HS2 will link eight of Britain’s 10 largest cities, as if there has been no such link since the days of the canals and the stagecoach.
	I would like to believe—and this is now a central argument in the White Papers—that HS2 will be the engine of economic growth and help the deprived regions, but I cannot find secure evidence for this. It is claimed that HS2 will be a bridge from the north to the south, but the railways have been such a bridge since Victorian times.
	An article in the Economist last week said that the worst urban decay is found not in big cities but in small ones. It mentions Hartlepool, which has grown far more slowly, as being typical of Britain’s rust belt. Can we really believe that HS2 will significantly help Hartlepool—or Barrow-in-Furness or Hull? We should not be deceived that it will wave a wand over deprived towns and villages.
	Earlier this month, my noble friend Lady Scott of Needham Market opened a debate on the railways in East Anglia. Unlike the experience of much of the north-east, she said that this was a thriving region. However, she made a strong case for significant new investment, as there had been no modernisation of many parts of the railway network during the past half century. The route of HS2 is 100 miles or more from the heart of East Anglia. Are we to take seriously the fact that we can both finance HS2 and the different needs of East Anglia or, for that matter, the south-west of England or important parts of Wales?
	The railway passenger, or the potential passenger, has an interest in several considerations. He or she wants good or better access to the places they wish to go, a reliable service, on time and without cancellations. He wants to travel in comfort and at a reasonable fare with an option at every hour of the day and on every day of the week. Above all there is the importance of safety. It is not axiomatic that travelling fast—faster than ever before—is a priority. It is time to scale down the hyperbole of the vision and to offer a more rigorous and sceptical analysis of the case for HS2.

Lord Grocott: My Lords, I welcome not only the fact that the noble Lord, Lord Greaves, has introduced this debate, but also his splendid, comprehensive opening speech, which covered so many of the arguments. Inevitably, a debate such as this will be pretty polarised; you cannot be half way in favour of this, stopping it half way along the tracks somewhere—you are either for or against it, and I am unequivocally, unashamedly, massively for it. I hope that there is no uncertainty about that.
	I thought it would be helpful to look at some of the objections—and of course we acknowledge that people who are directly affected by the route will be very concerned indeed. Whether you are for or against this proposition, you will acknowledge and recognise, as with other major developments, that there must be proper compensation and recognition for those who are directly affected.
	It is worth taking a little trip down memory lane, because when the original proposal for a London to Birmingham railway was put forward in 1832, the House of Lords threw it out. We know, due to a splendid article by Nick Serpell, that many of the grounds for that were stunningly similar to the objections
	that are being presented today. The effect on wildlife was mentioned, as well as the demolition of rural communities and the big estates.
	I would richly enjoy reading out all these quotes, but here is just one, from one of the contributors to the early part of the debate:
	“You are proposing to cut up our estates in all directions … If this sort of thing be permitted to go on, you will in a very few years destroy the nobility”.
	That is the kind of objection that was going around at the time. Most of the objections were very similar. Why do we want to go so fast? By the way, the first trains took five and a half hours. I am sure that whether you are in favour of HS2 or not, you will prefer the present service to one that would have taken five and a half hours. Thank heaven—I hope we can all agree on this—that the objections that were originally presented were overcome and that at least we had a railway from London to Birmingham. We did not require the people of the 19th century to get from here to Birmingham by canal or stagecoach; there was a mechanism other than that, which was terrific. So many of the objections proved to be false. The wildlife comes back amazingly soon after the cuttings and the embankments have been built. Of course, the investment has been repaid—I was going to say 100 times over— 1,000 times over. I could not begin to calculate the economic benefit of the original London to Birmingham railway.
	I mentioned that it was a Victorian railway. Essentially, we rely, in the 21st century, on a Victorian railway. It is a marvellous railway; wonderful engineers built it, and phenomenal engineers kept it patched up over all the years and made improvements, keeping the trains running, by and large, while they did all that. However, a Victorian railway serves us today. There is one big exception—that it is not even as good as the Victorian railways because large chunks of the system have been closed down. Routes, railways and stations all over the place were closed. One railway in particular that was closed down was a fine north-south route between London, Leicester and Nottingham—the Great Central Railway—that was closed down in 1969. Therefore in proposing a new railway we are not revolutionary in adding to what has historically been available; we are trying to repair some of the damage that was done by the vandalism of the Beeching era, when so much damage was done. Therefore I say, “Thanks very much” to the Victorians, but that will not do for the 21st century.
	I now come to the very common argument from the people who are opposed to this new line. I am sorry that there is no easy way. They say, “Let’s improve the existing railway. Let’s make some modifications to it so that trains can run through at greater capacity levels, with bigger trains”. We have been doing this for more than 80 years. We have kept on patching up, making do and mending, and amazingly, we have kept the trains running while we have done that. However, that is saturated. That argument has gone—there is no easy solution to that proposal. Interestingly, people do not ever say that about the motorways. I do not remember people saying, “We should not have built the M1 or the M5. We should have built loads of
	bypasses, strengthened the bridges and got more traffic running through on the old roads”. There comes a point when that proposal becomes ridiculous, and as far as the railway that we need for the 21st century is concerned, it is a ridiculous proposal.
	If people are serious about massive improvements on the north-south routes in this country to be done on the existing system, please do not travel by train while it is being done. You have seen nothing yet of weekend closures, bus substitute services and holiday closures. You cannot rebuild a railway to 21st-century standards while you are trying to run the trains on the existing routes. There would be huge dislocation if that approach was adopted.
	This is a visionary proposal. I salute my Government —the previous Labour Government—for introducing the proposal in the first place. I congratulate the coalition Government on sticking to their guns and acknowledging that this essential part of our country’s infrastructure has to come about. I salute the people involved: the former Secretary of State, the noble Lord, Lord Adonis, and the present Secretary of State, Patrick McLoughlin. It is not an easy thing to do, because the opposition is so widespread in so many ways, and so personal. However, I appeal: let us think for a moment of the astonishing vision and engineering skills of the Victorians who built our rail network, which, as I have said, miraculously serves us today. Our railway-engineering expertise was exported all over the world. They had that vision which we massively benefit from today; it is part of our responsibility to have a similar vision to ensure that future generations have a modern, 21st century rail network.

Lord Stevenson of Balmacara: My Lords, I thank the noble Lord, Lord Greaves, for securing this debate and I welcome the noble Baroness, Lady Kramer, to her new responsibilities. I declare an interest since I live in Little Missenden which is directly on the current route and therefore I qualify under a number of people’s acceptance to plead my special case. I will do that a bit, but the interesting thing about being a nimby is that because you spend a lot more time working out why these things are happening to you, you understand the overall picture a lot better than many others. It is for that reason that I want to speak today, not particularly because of the problems in Little Missenden, although there are many, not least the appalling compensation proposals which do not measure up to the rhetoric.
	Like the noble Lord, Lord Faulkner, and others, I am a supporter of the case for investing in improving transport services in the UK and in particular of upgrading our rail capacity using the most appropriate technologies. However, as my noble friend Lord Mandelson says, the supporters of HS2 have to do better than rely on dodgy forecasts and puffed-up consultancy reports. This is not an icon; it is a major investment decision for the UK, so it is right that, at a capital cost of £50 billion with ongoing subsidies, everybody should be convinced by the case before it is approved. To achieve that, we must debate and agree a proper economic argument which explains convincingly not only what problem we are trying to
	solve and why HS2 is the answer but also why other cheaper solutions do not do the trick. The Government have caused a lot of confusion on this point. First it was green and then it was speed, or was it the other way round? Then it was the need to fuel economic growth in the regions, recently clarified as “some regions but not others”. Now it is capacity on the west coast main line and connectivity with HS1, albeit that that constitutes an embarrassingly large gap in the current plans.
	This debate is on the economic case for HS2. On the facts so far available to us, there is no doubt that the economic case for HS2 is very weak. A project that costs £50 billion in capital needs a better case and value-for-money justification than we have seen so far. No wonder it has so many critics, ranging from the press to the Institute of Economic Affairs and the TaxPayers’ Alliance, from Alistair Darling to David Davis and many others, including the National Audit Office whose value-for-money report suggests a number of problems with the existing cost-benefit study and the Treasury Select Committee whose report published on the 2013 spending round concludes that only when HM Treasury has decided its own comprehensive economic case for supporting the decision should the Government formally reassess the project before deciding whether to proceed. In other words, there are very substantial blocks to moving forward on this proposal.
	So far all we have seen from the Government is the KPMG report, which, as has been said, far from proving the Government’s case, suggests that there will be as many losers as winners in the regions. The problem is that HS2 has been designated solely as a point-to-point railway line, lacking any proper integration with the classic rail network, the UK’s only hub airport or HS1. As such, the project exemplifies the silo approach of UK transport planning where decisions on aviation, classic rail and high-speed rail are taken in isolation, let alone thinking about the implications for things such as high-speed broadband. Current HS2 proposals need to be improved to ensure that the route connects into more of the UK, integrating with other transport networks and co-ordinating with the work of the Airports Commission.
	Surely we should not be considering in the early 21st century a transport solution which inflicts serious damage on our natural heritage. These may be old arguments but they are still real. The Woodland Trust has demonstrated that the Government’s preferred routes for both phases of the scheme will cause loss or damage to at least 67 irreplaceable ancient woods. The Chilterns AONB, which is where I live, is now the only AONB along the entire HS2 phase 1 and phase 2 route that would be adversely impacted by the proposed project. Actually, it would be destroyed. The draft environmental statement consultation published on 16 May accepts that a tunnel through the Chilterns AONB would perform better on environmental grounds compared with the current tunnel option. It would also reduce the operational noise impact and, for certain locations, would result in a reduced construction impact. It is feasible in engineering terms and I recommend it to the Minister.

Lord Alton of Liverpool: My Lords, as one of the sceptics, I congratulate the noble Lord, Lord Greaves, on giving the House the opportunity to have this important debate and for the way in which he introduced it. Since first arriving in Parliament in another place in 1979, I have been a regular user of the west coast main line from both Liverpool and Preston. Virgin provides a superb service and most journeys to London take just over two hours. It is specious to suggest that we need a faster rail link, which is no doubt why Patrick McLoughlin shrewdly sought over the summer to alter the terms of the debate away from the question of journey times to that of capacity.
	If the raison d’être for HS2 is a moving target, so are the estimated costs. In 2008, it was estimated that the project would cost £17 billion. By 2010 the figure was £30 billion. By this year it had reached a staggering £42 billion, according to some estimates, and nearer £50 billion once the cost of the rolling stock has been added in. The Financial Times—hardly part of a disreputable conspiracy—reported a private Treasury calculation of £73 billion, and all of this before a single sleeper has been laid. Having said that he has been changing his mind about HS2, the former Chancellor Alistair Darling is right to warn that this is a project that could easily run out of control. He says the business case has been exaggerated and that there are better ways of encouraging growth outside London. That is the main reason why I share his view.
	For the avoidance of doubt, I believe in public transport and have always supported the enhancement of our railway network, like the noble Lord, Lord Mandelson. I have supported capital projects that improve infrastructure, provide demonstrable economic benefits and create jobs. It is claimed that the region I live in will be a principal beneficiary of HS2. However, for reasons I will explain, and not simply because of the runaway costs, I have been opposed to this project in its present form from the outset.
	For a fraction of the cost of HS2 we could enhance the capacity of our railway system, by upgrading stations and platforms, lengthening carriages, improving railway stock, using new technologies and through timetabling and the reintroduction of services such as overnight sleepers to northern cities and towns. We could make significant improvements to our railways. Think of the opportunity costs at stake. A far higher priority for railway improvements should be commuter services and town-to-town links. Travel times between northern cities and towns are diabolical. To travel from Preston to London takes just over two hours; from Liverpool to Preston takes one hour, and from Leeds to Liverpool takes one hour and 47 minutes. Liverpool to Sheffield takes one hour and 41 minutes, and Liverpool to Hull takes three hours and 13 minutes. Those cross-Pennine, east-west services, not north-south services, are impeding economic development in the north.
	If we were really serious about the north of England, we would reopen passenger railway links in north Lancashire and link Manchester and Liverpool airports with express trains. I welcome the news, which the noble Baroness, Lady Kramer, whom I welcome to the
	Front Bench, gave me in a parliamentary written reply on 21 October, that there will be some improvements to those services. Perhaps she will tell us today how much money will be put into those projects compared with the investment on HS2.
	Liverpool will be placed at a serious disadvantage by HS2, which is why some of the colleagues of the noble Lord, Lord Greaves, in that city recently tabled a motion to the city council pointing that out. The CPRE suggests that,
	“it could risk Liverpool’s longer term regeneration”.
	Why? Because, unlike Manchester, which will have a direct line to the city centre, Liverpool will not, and there will be a requirement to change trains to reach some important destinations. At the very minimum, reconsideration should be given to the decision to build a second HS2 station outside Manchester in the green belt.
	I am also certain that, if these proposals go ahead, the magnetic appeal of London, with its fabled streets paved with gold, will suck people and businesses away from the north. KPMG’s report may point to overall benefits but, strikingly, it says that Greater London will be a £2.8 billion winner while 50 places in the UK, such as Aberdeen, Bristol and Cardiff, will be worse off. They estimate that Dundee and Angus could lose as much as 2% of GDP.
	Many of us will have heard from some of those already affected by HS2. Tim Ellis, a Staffordshire farmer whose family have farmed there for three generations, wrote to describe how the project, just 145 metres away from his land, has already blighted their property and business. He wryly commented:
	“What we really need is super-fast broadband—any broadband would be nice—not super-fast trains”.
	I do not live in one of the 70 constituencies through which HS2 will pass. If I did, I would deeply resent being accused of nimbyism for questioning the effects of this project on some of our most beautiful countryside. Alison Munro, chief executive of HS2, is wrong to characterise opponents as “a noisy minority” and imply that anyone who questions this project is an antediluvian luddite. Taken with the Government’s road-building plans, which will impact on five national parks, I am glad that many are in open revolt and demanding protection for our landscapes and the tranquillity of the countryside. We are too obsessed with bigger, faster, better and more. There needs to be further reflection before HS2 is allowed to proceed. The CPRE is right when it says:
	“Deliverability is trumping all other considerations”.
	Attempts to push through enabling legislation by May 2015, without due process and adequate consultation, would be an abuse of Parliament, and should be fiercely resisted. I hope that today’s debate will serve notice on the Government of your Lordships’ determination to do precisely that.

Lord Rooker: My Lords, I, too, congratulate the noble Baroness, Lady Kramer, on her new appointment and look forward to the wind-up.
	If we did not already have the motorways, canals and, I dare say, the railways, we would never be able to build them. We have no aircraft runways under construction, and no high-tech nuclear green power stations under construction—mainly because of a catastrophic energy White Paper in 2003. In the days of the great engineering projects, approved in private Bills by this Parliament, the likes of Brunel and Telford got on with their vision and won through in the end, and thank goodness they did. They would be ashamed and astonished to see us today, a scrimping nation getting by—or, at least, we think that we are. We pollute the overcrowded roads with congestion and cause the inefficient use of today’s very efficient car engines because of that congestion. We pollute the sky with internal flights. It will all come to a stop; there is not enough capacity on rail, so even more freight gets on to the roads. Then they clog—and it will end up as national gridlock.
	Is HS2 the complete answer? Of course it is not. Is the planned route the best? I cannot say—although it appears fairly straight, which I assume is a key factor for high speed. Should it be built? Most certainly. However, success will require better leadership of the project and I am not clear who is in charge. Major infrastructure projects by definition reach across the Parliaments and, while I would not insist on 100% agreement, there has to be a degree of operating outside the tribe on these projects. I do not see that at present. It is a pity that one of the first acts of the coalition was to abolish the Infrastructure Planning Commission before it had a chance to get going.
	In the recent HS2 publications, I am at a loss to understand why freight effects have not been considered. Is it because freight will not be on HS2 but, because of HS2, more of it will use the extra capacity on existing lines? That seems to me a major failure of communication on behalf of the project. I have been informed that HS2 could take 500,000 lorries off the roads.
	I much look forward to seeing Sir David Higgins as the chair of HS2 in the new year. I declare that I briefly worked with him when I was Regeneration Minister a decade ago and he was the chief executive of English Partnerships. He is impressive and he delivers, as his record shows. I hope that he will review all aspects of HS2—and that has to include the board. The Opposition had better give him full support. The Labour Government started this project, and it would be inconceivable to withdraw support. I am getting cheesed off listening to ex-Ministers swanning around the political salons pouring cold water on the project. I agreed with every word of the Secretary of State’s 11 September speech at the Institution of Civil Engineers. As such, I urge the Shadow Cabinet not to quit on the project but to fight for it, and I urge HS2 to make its communications and operations a bit more transparent. I also have some news for the BBC: I do not expect Land’s End, Great Yarmouth, Anglesey or John o’ Groats to benefit as much as the great city regions. I thought the way the BBC treated the KPMG material on last week’s “Newsnight” was a journalistic disgrace, but it should not have had to use an FoI request to get the figures explaining the map in the report.
	HS2 is not about minutes off journey times. It is about capacity and not relying on lines laid over 100 years ago. It is about serving one in five of the UK’s population. It is about, not serving, but creating city regions on a par with our EU partners, because we have not got any at present. That is why there is a constant drift to London. According to Sir Albert Bore, leader of Birmingham City Council, the West Midlands could see a minimum of 20,000 extra jobs and 50,000 with the package of local transport connectivity. Phase two could deliver up to 70,000 jobs according to Sir Richard Leese, leader of Manchester City Council. Some 70% of the extra jobs will be outside London.
	As for the line, it must end in Glasgow and Edinburgh. There is no question about that: there has to be a phase three. I hope we can then stop the environmentally wasteful, polluting internal aircraft flights. I would be happier if the Bill included the line to Manchester and Leeds. I would hope and expect construction to start in more than one location. England is not the wild west frontier that the great railways opened up in America. We should be able to start in London, Manchester and Birmingham and meet in the middle, as we did with the Channel Tunnel.

Lord Bradshaw: I congratulate the noble Lord, Lord Rooker, on his firm speech. I am speaking because I was responsible, at some time in my career, for the management of all the four main lines which go out of London to the north. They are now at least 85% full. When a system—a railway, water pipes, gas or anything—is at 85% capacity it is full, because just a small incident can spill over and cause havoc with punctuality or supply of service. So the capacity enhancement is urgently needed, but I am sorry that this thing ever got called High Speed 2 because it is not a high speed railway in international terms: they are not talking about going at about 250 mph.
	The upgrading of existing routes is a hopeless proposition. I have just read that next year the west coast main line will be shut for 36 days for urgent engineering work at the London end, running through Watford. That will bring back the horrors but this time it will affect more people because more people are now using the railway. The London end of this project needs rethinking because the way it has been drawn up is wrong. I do not believe there is any need, at least in phase one, to demolish houses in the Camden area. I must cast doubt on the quality of leadership of the project because it has not gone for the most sensible option. We do not need to demolish lots of houses for phase one: we can do that quite easily by other means.
	I was also responsible for the first stage of the HS1 extension. At the time people talked—in this House, I am sure, although I was not here—about the rape of the garden of England: it would never be the same again. However, a week or two ago I met a Labour MP from one of the constituencies affected. I asked him if he was getting a lot of trouble from HS1. He said, “No, none at all, but if you ask me about gay marriage I will bring you a few bags of letters”. That is the way
	in which the ill effects of this project have been grossly exaggerated by various opponents. There will be disruption while it is built but, as someone remarked, the wildlife and the birds come back. The railway does not have lots of service stations, garages and posters. It fits into the countryside and I am sure that noble Lords who travel around by train know many places where the significant Victorian railway buildings are not a blot on the landscape but blend beautifully into it.
	The new line will free up a lot of existing capacity and the talk about Coventry, Rugby and Milton Keynes not having as good a service is just not true. This month the Desiro company, which has built many of the excellent suburban trains used between London and Birmingham, has been given permission to increase the line speed of these trains to 150 mph. They are more comfortable and will be nearly as fast as the Pendolinos, and I am sure that customers will like them better. I am certain that all the places affected will have a far better service than they have now.
	I have a few requests for the Minister. Will she please facilitate the ongoing discussions about the London end? The Secretary of State knows about them and the noble Lord, Lord Berkeley, and I have been to see him. We believe that we can save a lot of money, not the odd million but the odd billion, by these proposals. Look again at the appraisal methodology that these people used. They used the old-fashioned cost-benefit analysis that was invented by the Standing Advisory Committee on Trunk Road Assessment in the 1960s and 1970s that compared the value of road schemes to see which was best. The process was never intended to value a project such as this. A recent publication by High Speed 1 has shown that the value of HS1 over 60 years is £17.6 billion. Will the Minister look again at the external benefits? This has been done by HS1, which looked at the effect on the value of property. Recently at Ealing Broadway it found that property prices are increasing sharply in anticipation of Crossrail. None of that value gets into the public purse but there is no doubt that it is of value, and it is time that the department looked at this issue to find a way to ensure that some of that value gets into public hands.
	Finally, I ask the Minister to reiterate the commitment to the continuing expenditure on the rest of the network, such as the ongoing improvements at Reading and Birmingham New Street. They are a compliment to what our engineers can do but there is a limit to what can be done within the confines of the existing railway.

Baroness Mallalieu: My Lords, like the noble Lord, Lord Stevenson, I must declare that I live in the Chilterns but not in an area affected by the proposed route. However, for most of my life I have known that stretch of countryside from where the line drops off the escarpment and cuts a swathe through Oxfordshire, Buckinghamshire, Northamptonshire and Warwickshire. It is not picture-book pretty. Unlike the Chilterns, it is not an area in which walkers such as the noble Lord, Lord Greaves, to whom we are indebted, come out in numbers at weekends or visit for its views. It is old England, big blackthorn hedges, pasture, beef cattle,
	hidden woods and coppices, and small villages and farms in which people have been born and lived all their lives. Through that countryside the route goes past Grendon Wood, in which Shakespeare is said to have been inspired to write “A Midsummer Night’s Dream”, and—this is for my noble friend Lord Grocott—Doddershall, a remote moated house built in 1520. The route also goes through 24 sites of special scientific interest and 67 irreplaceable ancient woodlands. It is proposed to drive HS2 through that, and for what? I will come to that.
	The project was agreed by the Government in 2010 without any strategic environmental assessment having been carried out, probably quite deliberately because this is an act of sheer environmental vandalism. A judge has already described that as “an egregious breach” of the guidelines. Litigation is going on at the moment and there will, no doubt, be a Supreme Court judgment next month. For that tract of our countryside and its people the impact is quite devastating.
	However, that was not the only flaw in the original decision-taking process. The business case was flawed, as is now generally accepted. The cost-benefit analysis, whether it should have been used or not, never supported the proposal. The budget was hopelessly understated, as has now become clear. I am aware that the lack of any proper consultation and the weakness of the economic case concerned a number of those at the heart of government at the time. I would like to pay tribute to the noble Lord, Lord Mandelson, and to Mr Alistair Darling in another place for having the courage to speak out about this. I am quite sure that others will follow.
	The decision to support this project in the first place by both main parties was a political one, not an economic one. I do not for a moment dismiss the genuine passion for the project of some, including the noble Lord, Lord Adonis, for whom I have the greatest admiration, but it is a passion which I believe led to a very expensive mistake. Nor do I underestimate the pressure that was put on politicians of both sides to go ahead from others who stand to profit: mainly the rail and engineering firms and also from a number of local authorities on the direct route who stand to benefit. They make up a rich and powerful lobby, but they are not succeeding with the public and nor must they. To misallocate transport investment to a high-risk, low-return scheme such as this instead of putting the money to low-risk, high-return infrastructure investment with far greater economic benefits in the long run is sheer madness.
	In the mean time, before the plug is pulled, the resources of the Department for Transport are being drained by efforts to try to create a new and better case and generate public support, while also delaying decisions on other necessary investment in our transport system. As we know, the original argument was speed—we will get you there quicker—but that failed, so the department is now trying the capacity argument in a desperate appeal to those standing in the corridors of our creaking infrastructure, where investment really is needed.
	It will not work; nor will the unconvincing assurances about future cost, because the public simply do not believe it. They have seen the figure going up and up. I think the public will be astonished to know that the figure which we are currently being given, £42.6 billion, does not include trains, without which the railway cannot operate, nor, as I understand it, does it include the essential infrastructure to create links to the city centres where the station is on the outside. Estimates that I have seen go higher and higher. Even in the north, last year’s polling showed that only 32% of the public thought it was a good use of money. If the people who have to pay for it do not want it, do not do it.
	This debate is about the expected impact of HS2. There will be some who benefit: the big rail and engineering companies and their employees and the towns and cities with stations on the direct route. But there are rather more places that believe they will lose out, and badly. The biggest losers of all are the poor souls who have to pay for it, who are the British public. What is more, HS2 is unlikely ever to generate enough income to cover its running costs. Construction has to be taxpayer funded, because it is unlikely ever to make a profit and no private money would touch it. The Public Accounts Committee in another place—its report is in the Printed Paper Office today—is utterly damning.
	I would like to hope that the impact of this whole saga is that no major infrastructure project will be handled like this ever again, determined by political expediency and not sound economics. HS2 is not yet the dead duck that it ought to be, but it is looking terminally ill. A huge amount of money and energy, much of it paid for by the public, is being devoted to try to breathe some life into it again. It has been called a vanity project, a white elephant on wheels, and a high-speed gravy train. Will someone with political courage please come forward and put it out of its misery?

Lord Lea of Crondall: My Lords, this debate produces a most unfortunate degree of polarisation among people who are normally much more sober in their analysis. I am on the same track as my noble friend Lord Rooker. When we talk about £8 billion being a lot of money, we are not talking about a project that will last for only 10 or 20 years; HS2 is going to be there for 100 years. Does anyone think that the Channel Tunnel will not be around then? The Victorian railways are still in place and HS2 will still be there. It would be interesting if a few leading Victorians were around today to look at what has happened over the past 200 years.
	Let us put this into some sort of context. First, what is our national income and how does it grow? At the moment, our national income is £1.5 trillion per annum, or £1,500 billion—so in 10 years’ time it will be £15 trillion and in 100 years it will obviously be £150 trillion; that is without any underlying rate of economic growth. Secondly, can the rate of return capture all the benefits? Of course it cannot. I hope that the noble Baroness, Lady Kramer—I, too, very
	much welcome her appointment—will take on board the comparison with Crossrail on this. We do not expect Transport for London to capture all the benefits that accrue at Farringdon or Tottenham Court Road. It would be nice if it could, but it cannot. The benefits for everybody in London are huge.
	In my first job with the World Bank in Africa I was involved in transport infrastructure investment. I know that there are rules—cost-benefit analysis is just one of the ways of describing what is done—but there are private benefits and externality benefits. As Alastair Morton, the first co-chairman of Eurotunnel said, economies are created through transport infrastructure. Therefore, you cannot capture all this with just one figure, and I am not surprised if people come up with very different numbers. It is easier to demolish the figures than to be absolutely dogmatic about how the arithmetic should be done.
	Although I am an economist, I do not have any difficulty in having an act of faith and saying that this project is a good idea. I know that capacity cannot be increased by building more motorways any more easily than it can by building more railways—it is far more difficult—but I ask the noble Baroness, Lady Mallalieu, to think about the alternatives. She may be a zero-growth person but I do not think that the rest of us are. We are 2% growth people around here, as you should be if you do not want unemployment and if you want to keep up the growth in technology and productivity. We are running out of capacity on the motorway system at a devastating speed. As well as road closures, we as a nation are facing a crisis from pollution on the motorways. A bit like Heathrow Airport, the railways need some new capacity.
	All the points have been made about trying to further improve the west coast main line and so on, but why should you want the trains to go at 100 miles an hour when they can go at 200 miles an hour? That is absurd. It is said that this is a densely populated island. However, it is no more so than Belgium, and Belgium has four high-speed train services. It is precisely because we are a densely populated island that we need HS2, and it is not counterintuitive to say that. Many speakers for whom I have the most enormous respect, including the noble Lord, Lord Alton of Liverpool, talks as if we will not be improving journey times from Birmingham to Sheffield, but actually we will be.
	No one is challenging the fact that the cluster of Midlands and northern cities—I come from Manchester originally and have lived in Nottingham—will be the area receiving the most remarkable improvements. As any transport economist would tell you, the most dramatic changes are in the 3-4 hour zone. If you halve travel times in the 3-4 hour zone, you can have a mega economic success story for the whole of the Midlands and the north, which is not possible with the motorway and railway systems that we have now. We shall see what happens in the next 30 years—only time will tell.
	I hope that we can have something like an infrastructure commission where people can give evidence and make sure that the cost-benefit analysis is done in the correct way. However, it is difficult to argue that there is only one way to capture the externality benefits.

The Earl of Glasgow: My Lords, I have long been an enthusiast for high-speed rail and therefore I will be reinforcing some of the arguments that other enthusiasts of this House have already made. I am concerned that the growing opposition to it, some of which we have seen here, from a number of powerful pressure groups and some prominent politicians on both sides of the House may cause the Government to lose their nerve and fall back on a compromise.
	The truth is that HS2 has been sold to the public very poorly. To begin with, much too much emphasis has been put on the high-speed element of the project. The faster speeds are one, but one of the less important, of the advantages of HS2. Why, ask our opponents, are we spending so much money merely to take 20 minutes off a journey time from Birmingham to London? Besides, they say, we need that extra time to work on the train. We then get into this argument about what people actually do on trains: work, read, look out of the window or go to sleep. Personally, whatever my original intention, I usually end up going to sleep.
	However, the high-speed element only really becomes significant when the line gets as far north as Carlisle and Scotland. Regrettably, that will still be some considerable time in the future. What is significant is that we are planning to build a brand new railway line, the first major new line since Victorian times. The main reason it is needed is to relieve pressure on the existing network and to increase capacity. Our opponents ask how we can justify spending so much money on a brand new railway line. As many noble Lords have asked today, would it not be better spent on upgrading the existing network? However, this is not an either/or situation. The Government promise to spend money on upgrading the existing network at the same time. It is all part of the same process, the same overall plan.
	The Government need to get across to the doubters and waverers that rail is the only practical, and potentially civilised, mode of transport in Britain for distances of more than 100 miles. More and more people are travelling by train now, and with the anticipated rise in population, there could be 20% more passengers by 2025. The fact is that there has been precious little capital investment in the railways for more than 100 years. With the regrettable exception of Beeching’s ruthless scrapping of so many of our branch lines in the 1950s, as the noble Lord, Lord Grocott, mentioned, Britain’s railway network is much the same as it was in 1910. At certain times of day, in many parts of Britain, it is already inadequate to accommodate the existing number of passengers. One can only imagine what it will be like in 15 years’ time if nothing is done.
	Now, at last, something is happening; something is being done. The Government, with Labour Party support, have recognised the future importance of rail and that in order to free up capacity on our existing railway lines we need to build a brand new one, linking London with major cities in the Midlands and the north. As we need a new line, it surely makes sense to build the most advanced and up-to-date model available, which has been tried and tested on the continent. That model is high-speed rail.
	Therefore HS2 is not a one-off, speculative gamble out on its own, as some of our opponents seem to suggest. It is an integral part of a long-term plan to modernise our whole railway network. That is the message that the Government have to get across to the public and to some of their Tory sceptics. Of course, there will be people, like some of the citizens of Camden Town, whose lives and outlooks will be considerably disturbed and disrupted by the construction of high-speed rail. It is right and essential that they should be generously compensated. However, I believe that fears of long-term damage to our countryside and wildlife are greatly exaggerated. Within 10 years, the scars will have healed, and the disturbed woods and farmland will have been reshaped and relandscaped.
	The advantages of high-speed rail greatly outnumber the disadvantages of temporary disruption. Although HS2 is not exactly squeaky clean environmentally, it is considerably less polluting than the hundreds of aircraft from Heathrow, Gatwick or Stansted which fly overhead and whose internal flights, I hope, will eventually be made redundant by high-speed rail. Britain’s major cities will feel much closer together and Britain in general will feel less dependent on London. Of course, the construction of the line will provide much-needed employment in times of austerity.
	I need assurance from the Government and the Minister that they will not get cold feet over high-speed rail and will not be tempted to compromise through fear of rising costs. The cost seems almost irrelevant when compared with the value and importance of the whole enterprise. We need a modern and efficient railway network. It is no longer an option; it is an essential. This is the most important and far-sighted transport project for more than a century. By the time it is completed most of us here will be dead but it will provide a greatly enhanced quality of life for our grandchildren. That is what we should be considering. Surely, the Government can better get that message across.

Lord Watson of Invergowrie: My Lords, I am a long-time supporter of rail travel and hold to the belief that trains are so important that they should be seen as a public service. They are an essential part of any country’s infrastructure and, as such, should be run as a service and not for profit. If that requires nationalisation and/or government subsidy, so be it. Surely it ought to be seen as a wise investment in economic terms.
	Is it not ironic that although none of the main political parties favours renationalisation of our railway infrastructure, none is opposed to our trains being owned and run by the state, just as long as it is not this state? The state-owned railway companies of France, Germany and the Netherlands regularly bid for our rail franchises, sometimes with success. I did not know this until I did some research, but the royal train is now operated by EWS, which is owned by Deutsche Bahn.
	My support for railways is often sorely tested. There are 28 different train operators and too often, it seems, they do not speak to each other, at least not in
	the same language. Perhaps that harks back to the point that I have just made. For years I used commuter services between Edinburgh and Glasgow, and it was rarely a pleasant experience. I do not do that now and I rarely use the commuter trains that serve London. However, I feel that it is a failure of the service when I am forced to stand and cannot get a seat that I have paid for. Just last weekend that happened in Scotland on a journey that I made between Aberdeen and Edinburgh.
	High-speed rail exists in all major EU countries—France, Germany, Italy, Spain and, of course, here—as has been referred to by many noble Lords today, so I am naturally inclined to support the concept of HS2. Yet there are two basic reasons why I have doubt in my mind. One is the spiralling cost. The figures I have seen suggest that when the project was first announced in 2008, the projected cost was £17 billion. By 2010, that had gone up to £30 billion. This year, it is at £42 billion plus £7.5 billion for rolling stock. The Financial Times has estimated that the final cost could be as much as £70 billion. I do not know the veracity of those figures but it seems that the projected costs are spiralling out of control.
	I certainly agree with my noble friends Lord Faulkner and Lord Grocott that transferring some of the cash—certainly not all of the cash—to upgrade existing infrastructure is not the answer. But surely some form of guarantee has to be given to control costs, otherwise support will gradually wither and die.
	In opening this debate the noble Lord, Lord Greaves, talked of the need to close the regional divide. I certainly support him in that. Anyone who looked at today’s Guardian will have seen figures on the front page showing that during the boom from 1997 to 2006, London and the south-east were responsible for 37% of the UK’s growth in output, and since the economic crash of 2007-08, London and the south-east were responsible for 48% of that growth. Every other region except Scotland has suffered relative decline over that period, which highlights the need to ensure that economic benefits are not concentrated, as they have all too often been, in London and the south-east. Regional benefits are the second reason I have doubts about HS2.
	I thoroughly agree with my noble friend Lord Rooker on the need for HS2 to be extended eventually to Glasgow and Edinburgh, but I think it highly unlikely that that will happen, certainly in the lifetime of most noble Lords, because the numbers that would use it would be held not to justify the cost. It is for the same reason that the motorway network stopped at Carlisle for 20 years before it was extended to Glasgow. I wonder how many noble Lords are aware that not only is there no motorway between Newcastle and Edinburgh, two major cities in the UK, but that there is not even a dual carriageway for a considerable part of that journey, which is a disgrace.
	The recent figures prised from the Government—and I use the term advisedly—through an FoI request on the question of the benefit of HS2 show that the coalition had attempted to withhold the bad news: the information in the KPMG report that, as the noble Lord, Lord Alton, rightly said, demonstrated that
	Aberdeen and Dundee would lose heavily when HS2 is in place, as, indeed, would other places such as Norfolk, Cambridge, Bristol and Essex, among others. That seems to stand to reason because there cannot be winners all the way. Not everybody can win from HS2. It is quite clear that there will be displacement of business and of travel, so to say that everything will be better with HS2 just does not stack up. I am prepared to accept that there will be considerable benefits, but certain parts of the country will undoubtedly lose as a result and that has to be faced by those who are particularly enthusiastic about HS2.
	I am not as yet prepared to call for HS2 to be abandoned, but I do believe that we need much greater certainty on costs and detailed proposals as to how those areas likely to suffer financially would be compensated in other ways.

Lord Snape: My Lords, like other noble Lords I, too, am grateful to the noble Lord, Lord Greaves, for allowing us the opportunity for this debate, and I congratulate him on what he said in opening the debate. It is the first time in the decade or so that I have been here—I do not know whether he will be pleased about this or not—that I have agreed with every word that he said. Perhaps he will not be, but it happens to be true.
	There was one thing he did not say that he might have done. He talked about the west coast main line being full, as have other noble Lords on both sides. We ought to recognise that the west coast main line, particularly the southern section, is not just full, it is in a pretty poor condition too, despite all the money that has been spent on it. The recent £9 billion overhaul has held off some of the decay on that route, but the last stretch in particular, from Watford to Euston is in a pretty poor state, as was revealed earlier this year. A report was published in the railway industry’s in-house magazine, Rail News, about an inquiry led by Virgin Trains’ chief operating officer, Chris Gibb, who had been seconded to Network Rail, about the state of the track, particularly that stretch from Watford to London. Chris Gibb reported to a joint board chaired by Sir David Higgins, then chairman of Network Rail, about whom many complimentary comments have been made during the course of the debate. Mr Gibb’s report says that,
	“trying to gain access to maintain and repair a railway built 175 years ago, largely through open countryside then but which now passes through many developed and densely-populated areas”,
	is extremely difficult. Yet opponents of HS2 appear to believe that by declassifying a couple of coaches on Pendolino trains and adding a few more trains, a junction here and a flyover there, we can somehow cope with the projected increase in traffic which will take place on the west coast main line if HS2 is not built.
	I fear that life is not like that. Chris Gibb’s final recommendation is that the line from Bushey, just south of Watford, into Euston should be closed every Saturday and Sunday night for between five and 10 years in order that all the infrastructure can be renewed. That is a pretty unlikely prospect, but I have to say to
	those who oppose the building of HS2 that we cannot go on, in David Higgins’s words, pounding the west coast main line. He said that by the time the first stage of HS2 is due to open in 2026 the route will be—his exact word—“trashed”.
	We cannot go on pretending that we can increase the number of trains out of London to some of our major cities on the existing infrastructure network. I listened carefully to what my noble friend Lord Stevenson had to say. I must say that I was not too impressed by some of the people whom he prayed in aid in support of his opposition. I do not regard the Institute of Economic Affairs as a particularly credible organisation, nor, although I will be careful out of deference to some of my near neighbours, could I bring myself to be too complimentary about the Countryside Alliance. Both my noble friends might like to read a document produced by Centro, the passenger transport authority in the West Midlands, explaining why the West Midlands needs HS2. I will leave it on the board for both of them if they like; whether they find that any more credible than the two organisations they cited remains to be seen. The fact remains that Centro believes that 50,000 more jobs could be created in our part of the world and a £4 billion economic boost would be given to the West Midlands if the project goes ahead.
	If HS2 does not go ahead, what happens to the growth in traffic forecast by all sectors to occur on our railway system? Presumably, it will go by road. My noble friend spoke emotively about the Chilterns. We are not talking about the four horsemen of the apocalypse going through the Chilterns, we are talking about a two-track railway. What happens to the M40 motorway? Do we extend and widen that to cater for the extra traffic which we all know will come? If the traffic does not travel by train, it travels by road.
	Earlier in my undistinguished career, I served on no less than three committees on the Channel Tunnel: the first abortive Select Committee in the 1970s, the Select Committee that gave the go-ahead in the 1980s and the Standing Committee that prepared the legislation. All the arguments that we are hearing today about HS2 were used then about HS1. The garden of England was going to be destroyed. The phrase “cutting a swathe” was one I heard from many a high-paid lawyer as I sat on the committee when they were talking about what was likely to happen in Kent. As the noble Lord, Lord Bradshaw, said, Kent has not been destroyed. Indeed, many of the previously peripheral towns in Kent have been enormously boosted economically by HS1, and there is no reason to suppose that the same effect would not happen when HS2 is completed.
	Fifty years ago, I was a signalman on the west coast main line, so I have some experience of what happened when trying to run trains when the line is being modernised. At least we had many alternatives in the 1960s. For example, Manchester trains ran from St Pancras to Manchester Central. The line from Matlock to Manchester Central was closed in their wisdom—by, I suspect, by a Labour Government, I must say—in the 1960s. The noble Lord, Lord Alton, talked about trains to Liverpool. They went up the great western line from Paddington to Birkenhead. That is not available
	to us any more. As my noble friend Lord Grocott said, there was always the great central line, which ran to Leicester, Nottingham and on to Manchester, which could also be used as a diversion. None of those lines are available to us today. There are neither locomotives nor rolling stock. It must come as a surprise to my noble friend Lord Mandelson to find that loco hauled trains are very rare in most parts of the country and guards vans do not exist at all. He must have missed that during his sojourn in Brussels, but the railway has changed somewhat. Pendolino trains will not run anywhere else. If there is no 25 kilovolt overhead wire, they will not get out of the depot, so they are no alternative. It is not often that I pray in aid the late Baroness Thatcher, but there really is no alternative.

Lord Truscott: I thank the noble Lord, Lord Greaves, for initiating this debate. It is high time that this House had a full and lengthy debate on this very important but, in my view, flawed project. During the debate last February in your Lordships’ House, I said that I feared with HS2 we are in danger of developing a huge and costly white elephant; with an ill-thought-out business case, social disruption and a catastrophic environmental impact. Sadly, nothing I have heard or read over the subsequent months and nothing that has been said in today’s debate has changed my mind. In fact, it has hardened my opinion.
	The noble Lords, Lord Stevenson and Lord Grocott, mentioned compensation. I can only guess the anguish of those affected by this scheme faced with the offer of wholly inadequate compensation or no compensation at all.
	This debate is really about the supposed benefits or otherwise of HS2. We have a project that has split views more or less down the middle; it has its supporters and detractors. The ranks of the latter, however, are swelling while the cohorts of the former are visibly shrinking. Here we have a scheme whose costs seem to go ever upwards. As a number of noble Lords, have said, the Secretary of State for Transport has already increased the cost of HS2 from £33 billion to £42.6 billion, excluding the £7.5 billion for the rolling stock which has been mentioned. The Treasury predicts that this will rise to £73 billion. The noble Lord, Lord Snape, has told us that some of the people criticising HS2 are not credible. He mentioned the Institute of Economic Affairs giving a figure of £80 billion or above. I hope that the noble Lord thinks that the Treasury is a capable source, otherwise we are all in trouble. The noble Lord, Lord Greaves, earlier mixed up his millions and billions, but we are talking here about tens of billions. These are indeed serious matters. On the face of it, HS2 looks like heading the way of Blue Streak and the TSR 2 programmes, both abandoned by the Ministry of Defence in the 1960s because of their spiralling costs over a number of years.
	Quite apart from the fact that cross-party support faces collapse if the costs rise above £50 billion—either now or around the time of the next general election—we have to ask whether this scheme provides value for money. The Department for Transport now seems to
	be moving away from the benefit-to-cost ratio analysis. Now we are told to look at the bigger picture. No wonder, as the BCR is currently one pound for every one pound spent on phase 1, and the latest figures will bring it below that.
	The public subsidy currently required is £33 billion. In congratulating the Minister on her appointment, I pose a question. Do the Government have a limit to how much public subsidy they are prepared to allow for HS2?
	Apart from the bogus arguments about increasing passenger capacity and claiming that no one works on the trains, only 2% of rail passengers travel on the west coast main line intercity trains—the only route to benefit from phase 1 of HS2. The rest of the national network will be largely ignored. That is the reality.
	The other issue rarely mentioned, but raised by my noble friend Lord Mandelson, was that HS2 will require £7.7 billion in cuts to existing rail services. The reality will be that a number of towns will experience worse services, not improved ones.
	KPMG, as mentioned, reported on behalf of HS2 Limited that the country would benefit to the tune of £15 billion. What HS2 suppressed, however, was the fact that KPMG’s report also showed that many areas of the UK, such as Aberdeen, Bristol and Cardiff, would significantly lose out to HS2. The noble Lord, Lord Alton, mentioned Liverpool missing out as well. It is obvious when you think about it.
	In short, we have a scheme that, if built, will primarily benefit the capital city, not the north. My noble friend Lord Mandelson, outlined that point. This has been the experience of all other high-speed trains in Europe, if we look at the lines to the capital cities Paris or Madrid. The scheme will devastate parts of our irreplaceable environment—I emphasise the word “irreplaceable”—including 67 ancient woodlands, as referred to by the noble Baroness, Lady Mallalieu. The scheme will not even be the best use of the money to upgrade our rail infrastructure. Targeted, more widespread, upgrades would be more effective, and I say that as a regular rail user. Worse, it will make such upgrades unaffordable in the future.
	Finally, can this country afford such monumental financial recklessness when there are other, greater national priorities, not only in terms of the rail network infrastructure but also such as developing airport capacity in the south-east?
	I understand from the Minister—I thank her for her Answers to some of my Written Questions—that the forecast spend for HS2 for 2013-14 is already £378 million. For 2014-15, it will be another £442 million. These are huge levels of expenditure very early on in a programme whose costs are only going up and up. In conclusion, the Government need to think again before a penny more is wasted on this mother of all follies.

Lord Berkeley: My Lords, I very much welcome this debate and I welcome the noble Baroness, Lady Kramer, to her new position. I am sure that we will have some interesting debates now and in the future. I declare an interest as chairman of the Rail Freight Group.
	I shall start by discussing the issue of capacity. My noble friend Lord Rooker mentioned freight. I shall quote from a paper from the HS2 Action Alliance. With a name like that, I would have thought that they would have been supporting HS2, wanting to make it go faster, but, surprisingly, they do not. It says:
	“Improving the existing West Coast Mainline is a more cost effective and risk-free way to meet future rail capacity needs”.
	Where are they living? Many noble Lords have spoken about the problems on that line, and I will not repeat what they have said. One of the problems is that if you improve a line, you either dig it up and close it or you extend it sideways into people’s properties. That will have just as much opposition as building a new line—in fact, probably more—because people will want compensation, as they do. Yes, the line is going past their property and has been there a long time, but their property is very valuable. That idea just does not work.
	The real problem that I want to mention with regard to capacity, though, is freight. Freight is different from passengers because it runs only if the customers and the train operators want it to and therefore, hopefully, it will make a bit of money. There is no subsidy. The industry has forecast a doubling of demand for rail freight on the west coast main line in 20 years. That is because the type of traffic that goes up that line is mainly containers from retailers. That is what retailers like—noble Lords will have seen some of the supermarkets giving green credentials on a packet of cheese, or whatever they are selling—so they have asked for this. Freight is growing by leaps and bounds; it might treble, for all I know. However, if you want a doubling of traffic in 20 years, that is the equivalent of an extra two trains an hour on the west coast main line. It is full already, as other noble Lords have said, and we are having discussions with Network Rail about how this can be accommodated, particularly when phase one is built and it stops near Tamworth. Still, it is a wonderful challenge to have.
	What is the alternative? There are two options. One is that it could go by road. Let us have a motorway through Little Missenden; I am sure that my noble friend Lord Stevenson would not like that. I was brought up in Great Missenden, and I would not like to see a motorway go through there; there is a railway there already, and a horrible road. If freight is not going to go by rail, therefore, it will go by road—or, the other option, it does not go at all. Do we want it not to go at all? What would be the consequences for the economy if it did not?
	I reflect that the latest route through the Chilterns is going to affect about 100 properties, whereas in Camden it will affect 2,700. That is why the noble Lord, Lord Bradshaw, and I have come up with our alternative route through Camden that will, we hope, significantly reduce the demand for demolition, perhaps down to nothing at all. I look at HS2 as adding two more tracks to the west coast main line, for reasons of capacity. It is pity that it did not start off being sold that way, but it is indeed for capacity. We need HS2, otherwise the traffic will not go, or we go by road.
	I conclude by commenting a little more on my noble friend Lord Snape’s comments about HS1, which I was also involved in. There is a study by Volterra
	consultants about the economic benefits of HS1, which could therefore apply to HS2. Apart from generating extra rail and car park revenues of £3.4 billion, which we may or may not want, the transport benefits include more than £100 million of congestion relief, an increase in rail revenue of £3.4 billion, while earnings per annum across the study area—Kent—have increased by between £62 million and £360 million due to the commuting facilities. You may not want to commute but perhaps you do. Overall this is estimated at a very significant benefit to the UK of HS1 over 60 years—it is a long-term project—of £17.6 billion. I think this is worth having.
	I support the way that this project is going forward. I welcomed it when it was launched by my noble friend Lord Adonis. I welcomed this Government taking it up, and I agree with my noble friend Lord Rooker that it would be unthinkable to cancel it. I would like to see it go to Scotland in some shape or form.
	I shall support this project. I want to see the costs come down and I shall work towards that. I think there should be better leadership and communication and I welcome Sir David Higgins to that role. I see no alternative to creating the necessary additional capacity if we want our economy to grow.

Lord Low of Dalston: My Lords, I was not planning on speaking in this debate, which is why my name is not on the list; this is not really my issue. I crave your Lordships’ indulgence for just one minute to lob a single point into the gap which, to my knowledge, has not featured in the public discussion and certainly has not featured in the debate today. I feel that it needs to be addressed, if not by the Minister today then in due course by the department and the promoters of the HS2 project. I am referring to the question of the kind of technology to be used.
	I have tended to lean towards being in favour of HS2 on the sort of grounds that the noble Lord, Lord Watson, was instancing: keeping up with, or catching up with, or limping rather lamely along behind our European equivalents who have had high-speed lines for 20, 30 or 40 years in some cases. It seemed to me that to turn our back on that kind of development was to hammer yet one more nail into the mounting number of nails in the coffin of UK plc. If we are to turn our back on that it is simply to unashamedly acquiesce even further to the long-term decline of Britain.
	I had this discussion with my son recently. I asked him what his view of HS2 was. He said that he was against it. I said “Oh dear,” and advanced the argument to which I have just referred. He said, “Yes, but if you want to base your support for HS2 on embracing the latest word in modern railway engineering and technology, why on earth are you thinking of doing it on the basis of 50-year-old technology that has been adopted by old Europe? You should be looking to the East, to the way in which they are building their high-speed lines now—in China, for example, between Shanghai and Beijing. It is the maglev technology to which you ought to be looking to represent the future, if it is the future you want to embrace”. I have not heard that point raised in public debate and I genuinely think that the proponents of HS2 need to address it.

Lord Davies of Oldham: My Lords, I express my gratitude to the noble Lord, Lord Greaves, and congratulate him on his opening speech. As my noble friend Lord Snape indicated, we have not always been in agreement with the noble Lord, but his opening remarks today set this debate off in a most constructive and interesting fashion.
	The Opposition support HS2. We believe that a new north-south line is needed. The issue of speed or whether it is a trophy has nothing to do with it. We need the speed because it increases the capacity. It is not a trophy because we did not ask and are not asking the nation to embark on this major construction because we wanted some kind of trophy like the French or Germans had with their high-speed lines. That is not so: it is because there is a real need. The need, which is quite clear, is one of a dramatic requirement for additional rail capacity in this country. This is one clear, strategic way— in fact, it is the only clear, strategic way—in which we can increase that capacity.
	Various figures have been cited in this debate. I am grateful to my noble friend Lord Faulkner who, in his usual hard-headed manner, indicated some crucial figures. The growth of rail has been double that of gross domestic product in the past 30 years. As the country has expanded over that time, rail has expanded much faster. Even in this past decade, when we all recognise the difficulties there have been in the economy, there has been a growth of 4% per year in the demand for rail services in terms of passenger numbers. This is not a passing fancy; it is a real need, to which we need to address the resources of the nation.
	My noble friend Lord Faulkner, expressing it in his usual cool manner, and my noble friend Lord Grocott, in his rather more expansive way, compared to this project with the 19th century. It is the case that the Victorians faced great challenges to their infrastructure projects as well but we have to face up to that challenge, too. People might say that the Victorians had a head start and all sorts of obvious advantages. Even the Great Exhibition, which was one of their triumphs—although the Crystal Palace did not survive too long afterwards—has been surpassed by the success of the structure and organisation of the Olympic Games in 2012, so we can do it too.
	The Games were an infrastructure project that was delivered on time and on budget. It had a contingency element in it, of course, as indeed this project has. What people often talk about as the enormous expansion of costs is a contingency of £14 billion, which may not be called upon. Of course, the pessimists will say, “Oh, but it will be”. They said that about the Olympic Games but the Games were delivered on budget. They were a much smaller project than this but we should not underestimate our capacity as a nation to rise to this challenge.
	Nor should we underestimate the need, which is often expressed in terms of the enormous pressure of commuting. For the London conurbation, it is always expressed in these terms because we know about the vast numbers of people who commute into London. Anybody would think that Birmingham is a speck on
	the map, yet the West Midlands have a commuting problem as acute for the people involved in it as at London Euston and the other great terminals of London. The West Midlands have had massive growth in commuter traffic. The demands of rail passenger numbers have increased by 105% in the past five years. Let us not pretend that this is an issue solely for London and the south of England; the pressure is exerted elsewhere, too. That is why we need to address those issues, and this is the most obvious way to do it.
	I also agree in every way with what my noble friend Lord Rooker indicated. On major infrastructure projects, which are bound to extend way beyond the lifetime of any one Parliament, there is no hope for this country unless we have a commitment across the parties and across Parliaments to deliver. Otherwise, we are trapped within a four or five-year perspective for the great needs of this nation. We will be selling everybody short if we fail on that.
	We can deliver. Crossrail has been an infrastructure project for more than a decade. It is still some way off completion, but it has survived elections and changes of Government because the commitment is there to meet an obvious and clearly expressed need. Some doubting Thomases in the House may say that is because that expressed need is among the London and south-east community with their greater leverage. The important thing about High Speed 2 is that it recognises the leverage that is being exerted from the regions and the cities of the north. That is why, when my right honourable friend Ed Balls, with his usual judiciousness, examined the figures of this enormous and significant increase in the projected costs, settled down and said that he wanted to look at the figures very closely and intended to scrutinise them in the future, he was doing what we would expect any responsible shadow Chancellor to do, let alone a Chancellor.
	Examining the figures and making sure that budgets are adhered to and that Governments are meeting the requirements of the projections is different from suggesting that there was any reneging on commitment to the project—far from it. From this Dispatch Box today—and I know that this will be done in a debate very shortly in the other place, too—we will reassert our commitment to HS2.
	However, I have words of warning for the Government because, my goodness, they are skilled in the arts of delay. We saw this exercised with regard to the problems of airports in south-east England. We have delay built into that until after the next election, even for any definitive stance on the matter. I am concerned about the delay on the HS2 project. Do the Government realise that HS1 was in Committee for two years and one month on the hybrid Bill? Anyone who has been anywhere near a hybrid Bill, either at this end or at the other end with regard to issues, knows how difficult hybrid Bills are. On HS1, it took more than two years to get the Bill through. On Crossrail, it took more than three years—in fact, nearly three and a half years—to get the hybrid Bill through; and we have not seen the hybrid Bill yet because we have not even got the paving Bill through Parliament. Therefore, as this construction was meant to start in 2017, the Government
	are already taking great risks on the timetable. I hope that the Minister will be able to give some reassurance that he and the department appreciate this point.
	This has been an absolutely fascinating debate, one of many that we are destined to undertake over the next few months and years. I very much welcome the noble Baroness, Lady Kramer, to the Dispatch Box, for the first time on an occasion where I have addressed these issues, and we all look forward to her response.

Baroness Kramer: My Lords, I join noble Lords in thanking my noble friend Lord Greaves for obtaining this important and timely debate. However, before I begin, I pay particular tribute to the noble Earl, Lord Attlee, who is suddenly in his place—he did not know that I would say this. He managed transport business in this House with great knowledge and skill and I know that your Lordships will wish me to express our respect and our thanks.

Noble Lords: Hear, hear.

Baroness Kramer: I feel rather redundant. The case for HS2 has been made so powerfully by the noble Lords, Lord Greaves, Lord Faulkner—whose book, Holding the Line, which he modestly did not advertise, sits on my desk as a bible—Lord Bradshaw, Lord Grocott, Lord Rooker, Lord Lea of Crondall, Lord Snape, Lord Berkeley, the noble Earl, Lord Glasgow—what a list. Every one of them is an expert, respected by this House, and I know that this House will listen to them. I welcome the words of the noble Lord, Lord Davies of Oldham, who reaffirmed from the opposition Front Bench his party’s commitment to this project. He is right that this issue must stretch across the politics of these Houses—it concerns the long-term infrastructure of this country—and I thank him for his words. I will touch on three key issues and will then respond to some of the remaining challenges raised in this debate.
	When I joined the board of Transport for London in 2000, London was running out of transport capacity. “Make do and mend” was no longer sufficient, and we had to commit to Crossrail. As I came to the department, therefore, it was with a sense of déjà vu that I saw that we face the same problem but on a national scale. Without HS2, key rail routes connecting London, the Midlands and the north will soon be overwhelmed. Demand for long-distance rail travel has doubled in the past 15 years to 125 million journeys a year. By the mid-2020s the west coast main line will be full. As any user of the line knows, the pressures are obvious now, as they are on the east coast main line.
	We cannot simply run more trains. Each new service has to be planned around what runs already. It is nearly impossible to find new train paths, and there simply is not scope for future demand, even if we use the very modest forecast of 2.2% growth in demand every year. Already, in my first two weeks in the department I have had to take note of two turn-downs by the Office of the Rail Regulator, for routes from Shrewsbury to London and Blackpool to London,
	because it is simply not possible to find an adequate train path for those services. However, HS2 gives us the capacity we need. It doubles the number of seats between London and Birmingham; it is capable of carrying a number of passengers equivalent to the population of Nottingham every day; and it will run 18 trains an hour when we finish phase 2, each of which carries 1,100 passengers.
	I will leave your Lordships with one set of numbers to remember. If we look at all the proposals for enhancing the existing rail network as an alternative to HS2, the most we can squeeze out of those enhancements is 53% new capacity from London to Birmingham—and as the noble Lord, Lord Snape, and other noble Lords have said, that is despite years of disruption to the routes on which that work will have to be done. We would gain 53% that way, but if we build HS2 we will add 143% more capacity, and that is the transformation we have to achieve.
	Transferring long-distance passengers to HS2 frees up the west coast and east coast main lines to develop significant additional regional and commuter rail services. We very much need those for the future, but we could even use many of them now. Very importantly, as the noble Lords, Lord Berkeley and Lord Rooker, have underscored, it leaves room to move far more freight onto rail. The west coast main line is especially crucial as we anticipate growing freight demand as the economy expands. Frankly, the road network simply cannot cope so rail has to take its share and only with that transfer of long-distance passengers and the ability to use those main lines can we achieve it.
	HS2 will be an engine for economic growth and jobs. The current estimates are that HS2 will contribute £60 billion to the economy. That is actually quite a narrow calculation and the wider effect could be much greater as we link key northern cities to each other and to the south. Incidentally, those who referred to the KPMG report must have misread some of the lines. It shows benefits to far more areas than those which suffer a relative disadvantage. It will help to rebuild our economy. The noble Lord, Lord Greaves, used that key phrase, “closing the regional divide”, because although London gains, the big winners are the northern cities like Sheffield, Wigan, York and Wakefield. I understand the demands to look at the case of Scotland. Scotland will benefit from phase 1 of HS2 and even more from phase 2, but there are ongoing discussions and we have all undertaken to examine this area.
	HS2 will also be a catalyst for city-centre regeneration. We have seen that with Crossrail and Kings Cross. The HS2 growth taskforce led by the noble Lord, Lord Deighton, who I know is so widely respected in this House, is now working to make sure that we maximise all of those opportunities. Frankly, if the noble Lord, Lord Mandelson, doubts that the north is going to benefit, I recommend that he have a conversation with the leaders of Manchester, Birmingham and Leeds. They want this line sooner because they recognise the benefits that are coming. Of course the line does not serve every city and region and the boost is naturally greatest in the places it serves directly. That is the
	character of infrastructure. We were right to build Crossrail even though the main winner was London and not elsewhere.
	HS2 is only one part of a much bigger investment programme which includes the electrification of the East Midlands, the west of England and Wales. There will be a £1 billion electrification of the Great Western main line to Cardiff and Swansea with intercity express trains from 2017. There will be a dualling of major road links in Cornwall and East Anglia. The noble Lord, Lord Alton, asked about the north. I have such a long list, I will read only some of it. We are electrifying the line between Liverpool, Manchester, Preston and Blackpool. We are also electrifying the trans-Pennine route from Manchester to York via Leeds. We are introducing electric trains between Manchester airport and Scotland. It is crucial that this House understands that the overall investment in transport infrastructure in the next Parliament is £73 billion and that of that, HS2 is only £17 billion. I can confirm that in response to a question from the noble Lord, Lord Bradshaw.
	Lastly, let me make a couple of comments on actual delivery. The upper limit of the cost is £42.6 billion. As others have said, that includes a very considerable contingency of £14.4 billion, so we have genuine scope to bear down on that number. The cost of £7.5 billion for rolling stock also includes a contingency. Let me assure the noble Lords, Lord Watson and Lord Truscott, that we are much better today at understanding how to work out cost and how to manage and build, which is essential to the HS2 project.
	The noble Lord, Lord Bradshaw, raised the question of using property uplift values as part of the way to pay for that. That is very interesting and we will look at that going forward. There is going to be a significant private-sector contribution because the stations, other than the operating part of the stations, undoubtedly can be provided by the private sector. We have seen the capacity to do that in places like Kings Cross. And after HS1 was completed, although it is a 100-year railway, a 30-year concession for that line was sold which paid for at least a third of the actual cost of construction. We have mechanisms in place to make sure that the cost is controlled and that we can turn to the private sector for significant parts of the financing. I intend to become very much more involved and look intensively at that issue.
	The Government are also committed to fair compensation for those along the route who are impacted. I say to the noble Baroness, Lady Mallalieu, and the noble Lord, Lord Stevenson of Balmacara, that the consultation is under way now and that they should contribute to it, as it is crucially important that they do. The package—and the Government are committed to this—will go above and beyond what is required by law. This will be a fair and generous package. We are looking at issues, and part of that consultation includes things such as property bonds, voluntary purchase and rural support zones. I recommend that the noble Lord encourage his neighbours and others interested to participate, because we need that dialogue.
	HS2 will also be built to the highest environmental standards, with, for example, some 70% of the surface lines between London and the West Midlands insulated
	by cuttings, landscaping and fencing. I say that again partly in response to questions raised by the noble Baroness, Lady Mallalieu, and the noble Lord, Lord Stevenson. I accept that when one builds a piece of infrastructure, there is an impact. It is impossible to do it without an impact, and it is difficult if it impacts on an area that you either live in or know and love. This project has made a real effort to minimise the impacts, but it must pay attention to costs, and the balance that we have struck is, frankly, the right one.
	The noble Lord, Lord Low, brought up the issue of Maglev technology. In China, Maglev goes between Shanghai airport and the city of Shanghai. For the kind of long-distance services that we are looking at with HS2, the Chinese are using very similar technology to that which we are proposing. We are choosing it because it is safe and proven. I think that we would all think that that was an appropriate approach to take for that size of infrastructure project.
	There are opportunities to build British capacity for business and to build jobs around this project. It is by far the largest infrastructure project in Europe. One focus that I and others in this Government will have is to look at how we can build the British supply chain to make sure that we reap benefits in gathering expertise and experience in business and then put those businesses in a position where we can export that kind of expertise to other projects across the globe. With all that come jobs for young people and highly skilled jobs; this is a fantastic job opportunity. To look back over the kinds of numbers that we have seen, the Core Cities Group alone predicts that HS2 will underpin the delivery of 400,000 jobs. Construction jobs, at their peak, will be in their thousands—50,000 at peak and probably 19,000 over the average of the project.
	HS2 is simply the most significant transformation of our infrastructure in a generation. It will link eight of the 10 largest British cities, serving one in five of the UK population; two-thirds of the population of northern England will be within two hours of London. As others have said, there will be interconnectedness between those communities as an additional base for stimulus within the north itself. This is a time for ambition; make do and mend will not serve this country.
	The noble Lord, Lord Mandelson, may have viewed the decision on HS2 as a vanity project, but he does not do justice to his colleagues when he says that. We have heard discussed again and again the requirement for capacity, and it is simply incontrovertible. We have to be able to move people in the modern era, and to move freight. To have a project that focuses on bringing prosperity to the north of England, so often forgotten in previous schemes, is critical and important. So although it is all right that the debate should continue, this Government remain—and I assure those who have asked—committed to this transformational project. I thank the noble Lord, Lord Greaves, and others for having this debate today.

Lord Greaves: My Lords, I thank my noble friend Lady Kramer for her excellent response to the debate and wish her every success in her new job. Not all government reshuffles are regarded by everybody in
	every party with great glee and joy but when my noble friend became the Transport Minister we were proud that she had taken the job and have complete confidence in her ability to do it really well in the remaining year and a half of this Government.
	I also want to thank everybody who has taken part in this smashing debate. I congratulate everybody on both sides. “Both sides” tends to be a description of the Labour Party in this debate but I will not press that too far. I thank the two noble Lords who—for once—found themselves able to agree fully with my opening speech for their compliments. I particularly thank my noble friend Lord Bradshaw and the noble Lords, Lord Faulkner of Worcester and Lord Berkeley, for saying exactly what I thought they would say and fulfilling my forecast.
	I cannot respond to the whole debate in the one or two minutes I have left. However, the noble Lord, Lord Mandelson, whose contribution I very much welcomed because it gave us a real debate, provoked me a little—not for the first time in my life—with one or two of his comments. He said that, “Its sheer cost will suck the lifeblood out of the rest of the country”. In my opening speech I mentioned a few of the infrastructure projects in London and the south-east where people do not come along to your Lordships’ House, or anywhere else, and complain they are sucking the lifeblood out the rest of the country. Crossrail, Crossrail 2, new railway lines—London seems to get a new railway line every few years—nobody says these are sucking the lifeblood out of the rest of the country.
	We all agree that, as the capital city of the country, London has to have a brilliant public transport system and by and large it has got one—I am green with envy every time I come here—but that is no reason for not continuing to do a good job. I do not know how much London’s new runways or new airport—or whatever it will ultimately be—will cost, but it will be the same kind of eye-watering amounts that HS2 is costing. However, the proponents of it, the corporate interests and the right-wing pressure groups who are trying to get rid of HS2 will not be coming here and saying they do not want it because they are leading the calls for more airport capacity in London. So there is hypocrisy here.
	The noble Lord then went on to refer to “a handful of the nation’s cities”. Are Birmingham, Manchester, Leeds, Sheffield, Derby and Nottingham a handful of the nation’s cities? They are the great regional powerhouse capitals in the West Midlands, the East Midlands and the north of England. I am sorry, it does not wash. These cities do not need to be served by HS2: they are the centres, the capitals, the hubs of the economy, commerce, finance and transport for those regions. That is why they are getting HS2.
	As I said, I accept that the south-west and East Anglia need better links. However, I do not accept the point made by the noble Lord, Lord Alton of Liverpool, that Liverpool will miss out. In due course, Liverpool may get a spur off High Speed 2. This may be after our time, though who knows, some of us may live for ever. That is unlikely but we can try. Bordeaux, in France, is not on the TGV lines but you can get a TGV train from Paris to Bordeaux. It travels on TGV high-speed
	tracks as far as Poitou—or somewhere in the intermediate region on the edge of the Paris basin—and then on ordinary express lines as far as Bordeaux. Some of them go as far as Tarbes and end up on little trundly branch lines. That is exactly what will happen for Liverpool and Newcastle: there is absolutely no problem about this.
	There is a lot of hot air being talked. I welcome all the people who spoke against HS2 because it exposes the paucity of their arguments and I have great pleasure in moving the Motion to note the impact of HS2. I do so because I believe it is very substantially positive.
	Motion agreed.

Deaf People: Public Services
	 — 
	Question for Short Debate

Lord Hunt of Kings Heath: To ask Her Majesty’s Government what action they will take to promote the needs of deaf people in the provision of public services.

Lord Hunt of Kings Heath: My Lords, I am glad to institute this debate on public services for deaf people. I very much welcome the noble Baroness, Lady Jolly, who is going to respond for the Government. I am sure that I speak for the whole House in expressing our best wishes to the noble Earl, Lord Howe.
	I am raising this matter because Parliament needs to put much greater focus on the issues facing deaf people and I hope that the debate will be the start of a much more considered engagement in thinking about what kind of services are most appropriate to support deaf people. I do not speak from any particular expertise but my father was a welfare officer for deaf people in Oxford. In fact, he worked for the late Baroness Faithfull when she was director of the first social services department created out of the merger of children’s and welfare services. We have now gone back to that split and I am not entirely convinced that that was a good thing.
	My main concern is that the life outcomes for many deaf people are not as good as they ought to be. Public services are not sufficiently focused on deaf people and there is probably a lack of drive within government and an over-reliance on local government without it being given the means to deliver the kind of support that is required. Perhaps I may provide some statistics. It is reckoned that one in six people in the UK are affected by deafness and hearing difficulties; more than 45,000 deaf children live in the UK; and 25,000 deaf people in the UK use British Sign Language as their preferred language Deafness is of course not a learning disability but half of all deaf people have special needs compared to one quarter of non-deaf people; over 50% of deaf people have experienced some form of abuse as children; and one in four deaf people will experience a mental health problem at some point in their lives.
	Of all the statistics that I could draw attention to, it is those on educational achievement that are the most important and worrying. In their GCSEs in 2012 just 37% of deaf children achieved five GCSEs at grades A* to C, including English and maths, compared to 69% of children with no identified special educational needs. The attainment of deaf children actually fell in 2012 from nearly 40% in 2011. That is not surprising because there is a direct connection between lack of educational achievement and lack of employment opportunities. Whereas 80% of the non-disabled population are in employment—it may be a bit less than that now—just over 50% of deaf people of working age are in work. An awful lot needs to be done to improve the support given to deaf people.
	The National Deaf Children’s Society report Stolen Futures demonstrated the disproportionate effect of public spending cuts on the lives of deaf children. It identified reductions in services across education, health and social care, and said that inconsistent decisions by the Government are setting children up for failure. The society says that to achieve their potential deaf children are dependent on multiple smaller specialist public services such as teachers of the deaf. The children need consistent co-ordinated support from an early age through to adulthood across the public services. Yet in 2012-13 25% of councils said that they planned to reduce one or more of the education, social care and speech and language therapy services for deaf people. What do the Government intend to do about that and the squeeze on resources and support services for deaf people? Will the Minister consider asking Ofsted to inspect specialist educational services for deaf children? Unlike schools and early year providers, apparently these services are subject to no formal scrutiny, despite their vital importance. The Ofsted inspection of SEN services would surely help. What are the Government’s plans to improve the educational outcomes for deaf children?
	There are similar issues when it comes to access to health services. This is a challenging problem. An Action on Hearing Loss survey in 2011 found that 35% of deaf and hard of hearing people experienced difficulty communicating with their GP or practice nurse and 24% said they missed appointments because of poor communication, such as not being able to hear staff calling their name. Have the Government thought of having national standards for access to healthcare for deaf and deafblind people? Are there any plans to provide all NHS staff and students with deaf and deafblind awareness training?
	That brings me to the question of the British Sign Language and alternative communication methods. I am sure all noble Lords were delighted when, after many years, British Sign Language was officially recognised as a language in its own right. That was a very significant movement which received a lot of all-party support. However, there are only 800 registered sign interpreters in the UK and my understanding, coming back to the health service, is that 70% of British Sign Language users went without an interpreter during visits to A&E in 2010.
	There are some solutions to the problems. We need to have more registered sign interpreters and support for family sign language classes. Clearly, if a child who is deaf is to communicate effectively with their parents and families, the whole family needs to have an understanding of sign language. Access to family sign language facilities becomes very much more important. I know that some organisations for the deaf think that having a named Minister responsible for driving a cross-government approach towards supporting British Sign Language would be a major advance. Will the Government consider how they could drive forward a number of initiatives to ensure that, following the decision to recognise British Sign Language, it will be put into practice in a very practical way? Will they make sure that it is used as much as possible, that public services recognise it and that there are enough people, both in family sign language facilities and among qualified interpreters, to provide the kind of support that people need when they come to embrace public services.
	Deafness and partial hearing are issues that affect people throughout their lifespan. We need to recognise that many older people have hearing loss. We know that, if their hearing loss is managed effectively, there is a real chance of improving the quality of their lives. However, we know that diagnosis is currently opportunistic and ad hoc. If an adult hearing screening programme could be introduced for everyone over the age of 65, it would deliver long-term savings to the health and social care system. That would enable people to adjust to wearing and looking after hearing aids at a much earlier stage. Early identification and remediation would be much more effective than dealing with some of the issues that now arise from people who lack a diagnosis at the appropriate time.
	Other noble Lords who will be speaking in this debate have far more expertise than I have in some of the issues that face deaf people. However, what unites us is an effort to raise in Parliament the question of services for deaf people and I hope that we will continue to do so in the future. I urge the Government to recognise that there is a need for a drive from the centre—from government—due to the diffuse nature of the services and the fact that people are spread around the country, which means that there may not be many people needing a particular service in a particular local authority area. I very much look forward to noble Lords’ contributions and to the noble Baroness’s response.

Baroness Eaton: My Lords, I thank the noble Lord, Lord Hunt, for bringing this important topic for debate to the House today. It is a matter that can too readily be defined as a health issue. However, as we have already heard, deafness has a profound effect on the life chances and well-being, and not just the health, of those suffering from the condition.
	I speak from very limited experience but I now have a two year-old grand-daughter who has an as yet unknown level of impairment. As a family, we have seen some of the initial difficulties for her and
	are experiencing the challenges facing a family in understanding the issues and how we might learn to develop ways of helping her.
	With almost one in six of our population living with such an impairment, I am pleased to see the Government taking action on the matter with the development of the national action plan on hearing loss. They are working with NHS England and Public Health England, and engaging with organisations that specialise in this to develop a pathway in this important and growing issue.
	However, as a resident of Bradford and a member of the city council, it is deeply concerning to me that the rate of deafness among our children, at 2.3 per 1,000 children, is double the national average of one per 1,000 children. The number of active cases known to the service for deaf children in Bradford between 2012 and 2013 stands at 678, of whom 76 are classified as being profoundly deaf—that is, entirely deaf. Of the 678 children in Bradford who have a hearing impairment, 548 are in mainstream schools and an additional 89 are in schools with additionally resourced centres attached. A further 41 children are in specialist schools, not necessarily as a result of a hearing impairment.
	Also of concern is the fact that this is a particular issue for our city’s Asian population. It is encouraging to see the steps being taken by our schools and authorities to allow our deaf children to benefit from a full and satisfying education.
	Working with the University of Leeds, the teachers of the deaf service in Bradford are researching the development of language and literacy in multilingual and multicultural families. With a staff of more than 60 personnel, the service is able to provide specialist assistance to multilingual households with everything from full-time teaching to liaising with parents and providing speech and language therapy. It is worth noting that, of the families working with this service, 67 do not speak English but communicate with their children with hearing impairments by using sign language. Understanding the language barriers and working around them will be key to ensuring that these children have the best possible chance to advance just as other children do.
	There is a protocol of transition from children’s social care to the sensory needs service in adults’ services. This will provide a specialist service to young people who are over 14 years old and are British Sign Language users. This service will routinely attend all the education reviews of these young people in order to provide advice and information. By doing so, it is hoped that the transition from children’s educational services to adult services will run more smoothly.
	The noble Lord, Lord Hunt, has already mentioned the underachievement of deaf children. Certainly, the survey by the National Deaf Children’s Society showed that deaf children in Yorkshire suffered huge disadvantages in terms of GCSE grades. It is therefore concerning to note that among those qualified as specialist teachers for the deaf, the average age is now over 50, something that is sure to create a greater problem in years to come and to impact on the education of children with hearing impairment.
	Responses to a DCMS seminar paper addressed the wishes of those within our society who are deaf, stating that it is far preferred that an inclusive manner in services and policies be adopted rather than an exception-based rule. This means that the mainstream should, indeed must, wherever possible, cater for the community as a whole and not simply the majority for whom hearing is not yet a problem.
	An issue that frustrates those who are hearing-impaired is the general lack of knowledge, understanding and training around the issue. The Guardian newspaper published an article on 10 May highlighting the issues that deaf members of society face. In one case, a deaf patient at a hospital was unable to communicate with his doctors, nurses or those around him for 12 days because no sign language interpreter was provided.
	Action on Hearing Loss published a policy statement entitled Access to Services for People with Hearing Loss in June 2012, directly addressing the issue of contacting services. They observed that people with hearing loss face very basic but fundamental hurdles when contacting organisations that only provide telephone numbers in their contact information and highlighted their awareness of the fact that staff simply hang up regularly on text relay telephone calls because the operator does not understand how to use the technology.
	Further on the lack of the use of appropriate technology, the Lancet published an editorial in March 2012 highlighting the issue of deaf people physically having to go into GP surgeries in order to make an appointment, due to the lack of provision of e-mail and text software. This is something that may not be too much of a difficulty for a younger person, but for those who are ageing it becomes a real issue and something that could be solved very easily by implementation of basic technology and training of staff to understand what considerations or differences should be considered when assisting someone who does not have full hearing capacity. Aside from this, it is surely to be hoped, or rather expected, that those within our society who cannot communicate in the same ways as the majority of the population, be afforded the same basic services. Access is one of the biggest barriers to deaf adults. This includes all areas of life where there is a need for communication.
	In my own authority, Bradford, there has been a vast improvement in accessibility for deaf people. Deaf people now have representation on the Strategic Disability Partnership, providing a forum for full engagement, as representatives on this forum feed information from the deaf community into the partnership. There are BSL and subtitled theatre performances, opening up the world of entertainment to deaf people. Hearing loops are provided to give access to those who are hard of hearing. Representatives from the Deaf and Hard of Hearing Group sit on the Bradford theatres users’ group and have been influential in generating improvements to services. Our museums have BSL videos that provide detailed information about exhibits. Our libraries have full internet access, enabling deaf people to access online information. Excellent work has been done with the police service, which now provides much improved access to communication, particularly in areas such as hate crime. Adults’ services include statutory assessment
	and support services where staff work in inspirational ways to support service users. An example of this is an individual budget to purchase care where the worker can communicate in BSL and has an understanding of deaf culture and community. There is also a technical service, which provides flashing or loud doorbells so that older people are not put at risk by leaving the door open or not being able to hear when the home care worker calls.
	While there have been great strides in improving access for the deaf to services in many areas, there is still much room for improvement. There is a high correlation between sight and hearing loss and learning disability, which needs much greater research and provision. Video-conferencing services enable deaf people to have BSL interpreting via a web link. Skype is being tested but the quality needs improving. Participation for deaf people in CCG user forums would greatly help the deaf.
	Despite improved access to communication and information, social isolation and exclusion continue to be major factors for deaf and hard-of-hearing people. Work towards more integrated pathways, with transitions between education and children and adult services, is vital, and must be part of plans for service development. Local government, working with the local community and other appropriate organisations, often are best placed to develop services suited to the needs of service users who have special requirements. Legislation often can be too prescriptive and can prevent flexibility and creativity.

Baroness Brinton: My Lords, I congratulate the noble Lord, Lord Hunt, on securing this debate. I also have an interest in this topic. For 10 years, I was chair of governors of Mayfield primary school in Cambridge, which has the hearing impaired unit for the southern half of Cambridgeshire. My sister is a BSL interpreter at a university and I have deaf friends. I am proud to say that the Liberal Democrats passed some policy at a key debate at the recent conference in Glasgow. We are committed to the principle that deaf people are entitled to identify with their own language and to have this respected, regardless of minority or majority language status. We also want to see better awareness of information needs and services for BSL users, particularly in health, education and employment, as has been outlined by the two previous speakers.
	In the time available, it is impossible to cover everything, so I shall focus specifically on education and family services. All children at Mayfield, whether they have hearing or are hearing impaired, learnt all songs for assembly both in sign language and singing. My adult daughter still remembers some of it. Children in the hearing-impaired unit were fully integrated into class with their hearing contemporaries, while also becoming fluent in British Sign Language and lip reading—but that is really for the second part of my speech, about the education of children with hearing impairment.
	Research shows that early communication within the family is the strongest influence on language development at the age of two. However, if a deaf child needs to communicate in sign language, many
	hearing parents may struggle to communicate with their child because they have no knowledge of deafness or sign language. Many families who need to use sign language with their child are not getting the services that they need. Often, they are forced to pay hundreds of pounds just to learn to communicate with their own child. In several Scandinavian countries, that service is provided automatically and free of charge to all parents of deaf children.
	It is good that the Department for Education is funding the I-Sign consortium to improve the availability of sign language courses to families. The work of the consortium has been recognised by even the Prime Minister as a success. One family commented:
	“It is not always easy having a deaf child in the family and the opportunity like this course helps us to be positive about deafness and reflect on different ways of communication with a deaf child, this course has made a huge difference to the family”.
	However, in 2011, a telephone survey by the National Deaf Children’s Society revealed that 56% of local authorities surveyed did not provide any support to families wanting to learn sign language, nor did they provide the society with any information. The support provided by other local authorities varied considerably and it is clear that not all families can rely on ready access to family-friendly sign language classes. What further steps will the Government take to ensure that families get the support that they need to promote early years communication for deaf children? Given how important that is, is there some scope for considering following the example of Scandinavia and placing a duty on local authorities to provide that support?
	On education, many deaf children rely on support from their local education service. This support is often provided in the form of a teacher for the deaf who might support families in the home with early language and communication, visit deaf children in mainstream schools, support deaf children directly and/or advise mainstream teachers on how to adapt the curriculum and use technology effectively, or contribute to specialist assessments of deaf children and intervene to promote good outcomes. There is real concern that these services are being severely undermined by public spending cuts. The department repeatedly tells us that it has protected funding for the most vulnerable learners, but, as has already been mentioned, the NDCS’s Stolen Futures campaign has established, through a freedom of information request to all local authorities, that 29% of authorities plan to cut specialist education for deaf children this year. A further 28% are at risk of cutting services, or undertaking a review of them. These cuts are having a critical impact on deaf children.
	The Government say that local communities should hold authorities to account and suggests that the Children and Families Bill will enable families to do this. Surely this is complacent. The NDCS has found that many local authorities do not disclose information nor involve parents in decisions about spending cuts. As currently drafted, the Bill will not directly improve accountability in this area, not least because it does not require local authorities to disclose expenditure on SEN support services as part of the local offer. How will the department ensure that its SEN reforms can
	be successfully implemented in the absence of any action to ensure SEN funding is adequate and not being squeezed out by other funding pressures?
	I, too, am very concerned about a shortage of teachers for the deaf across the UK. Anecdotal evidence from services suggests that it is becoming increasingly difficult to recruit to vacant posts. Some of the detail has been outlined earlier, but I ask the Minister whether the department has carried out any assessment of the teacher for the deaf population. Is there a need for a national recruitment process? While I welcome the local offer outlined in the Children and Families Bill, I am concerned that it does not go far enough in recognising the importance of specialist education support for deaf children and other children with sensory impairments. The NDCS, RNIB and Sense are all calling on the department to make improvements to the Bill before Committee.
	The key issues are also relevant to this debate. There is no explicit requirement to publish information about the local offer and neither is that offer published by type of need: they only have to provide generic information about special educational needs. It is also not clear that the local offer will follow a set format. That can be difficult for parents trying to compare provision in different areas. The local also offer needs to be underpinned by a minimum provision. Too many children with a sensory impairment are being denied the support they need, at a considerable cost to families. The department argues that minimum standards would lead to a race to the bottom and stifle the development of local offers. Surely the opposite is true: in the absence of any expectation on minimum provision, local authorities with better provision will reduce it in line with poorer neighbouring provision. Can the Minister provide explicit reassurance that local authorities must include information about specialist support services for deaf children in their local offers? Will the department establish clear expectations for minimum provision to be included in the local offer, in line with a call for action on this from the Education Select Committee?
	Finally, on an important note that I have not yet heard covered, outside the range of education, what are the Government are doing to develop a vaccine against cytomegalovirus, one of the main causes of congenital deafness and blindness? Some 50% of the population are estimated to be carriers, but it is only dangerous if contracted in pregnancy and transferred to the foetus. The medical advice that a mother carrying the virus should not touch anything—including her other children—that might mean she contracts the virus is, frankly, ridiculous. If there were a vaccine for this virus, it would be targeted at a very specific group: mothers and women planning to be mothers. Surely, with such a small target group, it is worth doing in order to prevent the dreadful congenital deafness and blindness that some children have when they are born having suffered from this virus.
	In conclusion, services for deaf children and their families have some strengths, but there are a number of worries that could affect these children, now and in their future lives.

Baroness Howe of Idlicote: My Lords, I, too, thank the noble Lord, Lord Hunt, for introducing this important mini-debate, and particularly commend his comment that the older you get, the more likely you are to have problems. As we all know, we are all getting older. Therefore, this is definitely an issue that has to be tackled.
	In my case, my hardness of hearing began when I had children. I think that that was inherited, too. Over the years, it has got to the point where there is no further help other than good amplifiers, such as we have in this Chamber. Indeed, I was perhaps one of the victims of an early mistake, which in those days was called mobilisation of the stapes. That also happened to me, and that one is my really deaf ear.
	Today, I should like to speak first about the importance of health services for deaf children and young people and, secondly, about support for their families with communication.
	I start by highlighting the importance of the newborn hearing screening programme. Many regard that programme as one of the major health successes of the past decade. Prior to that programme, many children born deaf were not diagnosed until as late as three and four years-old. Such late diagnosis does significant damage to the deaf child’s language and communication skills and, obviously, to their future prospects. Early diagnosis provides the opportunity to put in place a central support as soon as possible, so that deaf children can achieve their full potential. The National Deaf Children’s Society is clear that that has led to improved outcomes for deaf children already.
	It is therefore important that we continue to maintain that programme at the highest possible level and standard. What steps has the Department of Health taken to monitor and protect that service in the context of the Health and Social Care Act and significant changes to health services? Is the department monitoring whether the programme continues to be adequately funded and whether, when their children have been diagnosed as deaf, parents continue to experience a joined-up service between public health and the NHS? Will the existing quality assurance programme continue to include both diagnosis and follow-up interventions in audiology services, the latter being as critical as the former? It is vital that we do not take our eyes off the ball and let the service wither away, so I would welcome the Minister’s assurance on that point. If the noble Baroness, Lady Jolly, cannot give us a response today, perhaps she will see that someone from the department writes to me.
	I also highlight the need for health services to be more accessible to deaf young people. The National Deaf Children’s Society’s youth advisory board spent the past year working on a new campaign to improve deaf awareness in health professionals. I understand that it hopes to launch that campaign, called “My life, my health”, early next year. Deaf young people have provided NDCS with numerous examples of poor practice. We have heard of some already. One deaf girl had missed several appointments at her GP because she is unable to hear her name being called. She has now, ironically, been given a final warning not to miss
	any more appointments. Another deaf person aged 18 no longer wants to rely on her family to access information. She told NDCS:
	“My family and friends are fed up with coming with me to help with my communication support”,
	but until and unless action is taken to ensure that this information is given in an accessible way, she will continue to be unable to access appointments independently.
	Many will be appalled by both of those examples and the continuing existence of poor practice in delivery of health services to deaf children and young people. Do the Government agree that action is needed to promote deaf awareness among health practitioners as well as the provision of accessible information? Maybe the noble Baroness, Lady Jolly, will urge the Government to support this campaign and its aims.
	Finally, I would like to highlight the importance of communications support to families with deaf children. I have tabled an amendment to the Children and Families Bill that would require local authorities to ensure that there is sufficient provision of sign language courses to families with deaf children. There is widespread concern that the current provision is far from sufficient or adequate.
	Children cannot develop effective language skills if their families cannot communicate with them. This communication support is vital for the social development as well as the educational development of deaf children. However, where sign language is the best option for the child, too many families are being forced to pay huge sums to learn sign language to be able to communicate at all with their own child.
	I am aware that the Department for Education has funded various projects to address these concerns. This funding is certainly welcome and appreciated. Is this leading, however, to the step change in sign language provision that we need? I question whether local authorities truly appreciate and understand all the needs of deaf children.
	There needs to be a much stronger expectation on local authorities that support on sign language will be provided to families if they need it. We would now regard it as unacceptable if local authorities did not provide short breaks for families with disabled children. Many believe that the Government need to act to make it equally unacceptable for local authorities not to provide support for families wishing to learn sign language.
	I hope that the Government will give my amendment to the Children and Families Bill the strongest consideration when it comes for debate before the House. I look forward very much to hearing what the noble Baroness, Lady Jolly, says in her reply.

Lord Rogan: My Lords, I, too, thank the noble Lord, Lord Hunt of Kings Heath, for initiating this important debate. In our modern society we excel when it comes to discussing rights, but my experience is that we are usually better at discussing them than doing anything about them.
	In this media-driven era, there is a natural temptation and pressure upon government and its agencies to satisfy the rights of those who are most adept at securing air time, and media interest, rather than the rights of those who are most in need. Deafness is nothing new. It is clearly an issue which affects a significant number of people. In Northern Ireland alone, there are more than 200,000 people who are deaf or hard of hearing. That is 15% of people living in Northern Ireland; a significant proportion of the population—and no doubt a rising proportion, given the increasing numbers of people who are living well into old age. I find it perplexing, therefore, given the scale of the issue and society’s familiarity with it, that we seem to fail so miserably at even the basics of providing adequate access to public services, let alone equality of access.
	Access to the health services is a special area of concern. As has been mentioned twice, it is particularly disappointing to note that deaf charities in Northern Ireland have raised instances of deaf people being left in the waiting room of audiology clinics because their name was called out. Their name was called out verbally, even after staff had been notified that they were deaf. It is daft.
	In 2009 the British Deaf Association in Northern Ireland and the RNID contacted GP practices throughout the Province to ask them about hearing, blind or partially sighted issues. Some of the results were rather concerning. Half of the GP practices were yet to provide any training to staff about deaf, visual, or general disability awareness. Only 15% of GPs had had disability training. Half of all the responding practices also said that, although they had induction loops in their waiting rooms, only 16% had loops in consulting rooms.
	Getting an appointment to get to the surgery, however, also seemed unnecessarily difficult, with a general lack of provision to make contact or arrange appointments by e-mail. Deaf people also complained that GP practices and hospitals often did not respond to calls to their minicom system or to faxes. Out-of-hours and emergency access seemed even more problematic, as did the ability to book interpreters. All these issues create a reliance on friends and family, which in turn undermines independence and leads to feelings of isolation and even despair.
	The charities have suggested that this collectively points to a lack of general awareness, understanding and insight concerning the needs, circumstances and experiences of people with disabilities. It would also appear that there is an inadequate grasp of the legal obligations placed on public service providers by the Disability Discrimination Act. While access to health services is of most concern, the complaint applies across the board, from jobcentres, benefits offices and leisure facilities to issues such as interpreters for deaf parents at teacher/parent meetings, school correspondence, emergency telephones on the motorway, arts and cultural events—indeed, the entire spectrum of life in a modern welfare society
	As the British Deaf Association in Northern Ireland put it, deaf people are currently not afforded access to public services on, or even near, a par with hearing
	people. Deaf people simply want to be included in everyday society and given the opportunity to make decisions and choices for themselves. Surely it is incumbent upon our Government to play their part to facilitate that process and to ensure that deaf awareness is given greater focus.

Baroness Wilkins: My Lords, I congratulate my noble friend Lord Hunt of Kings Heath on securing today’s debate on the needs of deaf people in the provision of public services. Parliament is currently giving a flurry of attention to the needs of deaf people. Let us hope that this results in some strong, positive action and that it will achieve real gains. It is so vitally necessary. I am afraid it is inevitable that I will repeat many of the points that have already been made, largely as a result of the excellent briefing given to us by the National Deaf Children’s Society, but I hope that that will only serve to persuade the Minister to respond positively.
	Last week Sir Malcolm Bruce, the right honourable Member for Gordon and chair of the All-Party Group on Deafness, led a debate in the other place asking for recognition of the importance of services for deaf children and young people. This followed a petition, signed by more than 50,000 people, calling on the Government to protect the funding for these vital services. Happily, his Motion was accepted, and I hope that this debate will send the same strong signal—that we should protect services for deaf children and young people.
	Yesterday in this House we started the scrutiny in Grand Committee of Part 3 of the Children and Families Bill, which deals with special education. The needs of deaf children and young people will be highlighted by a number of the amendments that I and others have tabled. There needs to be considerable movement by the Government if the support for deaf children and young people is to improve. For instance, the Bill currently relies on parents to police the SEN system but does not provide them with any substantive new rights to hold local authorities to account.
	It is on the services for deaf children and young people that I will be focusing today. As we have heard, it is of great concern to us that, according to government figures, only 37% of deaf children achieved five good GCSEs last year compared with 69% of children with no identified SEN. Thirty-seven per cent is a dismal and unacceptably low figure—it is shameful. I acknowledge that improvements have been made in this area over the past five years but, when we consider that deafness is not in itself a learning disability, it remains outrageous that the gap between deaf children and other children is still so wide. There is no reason why the majority of deaf children should not achieve the same as other children, provided that they get the right specialist support. But too many deaf children are not getting the specialist support they need.
	Worse still, according to evidence collated by the National Deaf Children’s Society, that support is now being cut in many areas. As we have already heard, freedom of information requests to all the local authorities in England have established that 29% of them plan to
	cut specialist education services for deaf children this year. A further 25% are either at risk of cutting or undertaking a review of their service and these cuts are happening despite the commitment from the Department for Education that it has protected funding for vulnerable learners.
	Surely there is more that the department can do to ensure that local authorities do deliver high-quality services and are held to account when they fail to do so. One such action would be to require Ofsted to begin inspecting these vital services for deaf children. When we consider how much scrutiny mainstream teachers and schools are subject to by Ofsted, it is shocking that teachers of the deaf in specialist support services are subject to virtually none. That can only send a signal that deaf education is less important.
	When we consider all the competing pressures that local authorities face, it is hardly surprising that the lack of external scrutiny makes it even easier for local authorities to cut services. A sharper eye of scrutiny would also incentivise local authorities to improve services that are inadequate. I am very pleased to see that the noble Baroness, Lady Brinton, has tabled an amendment to the Children and Families Bill which will address this. I strongly support the amendment and I hope that the Government will give it their strongest possible consideration.
	Separately, I am concerned that we need to do more about the recruitment of teachers of the deaf. Teachers of the deaf undergo two years of additional training to gain a mandatory qualification in teaching deaf children. Their important role has been recognised in the new draft SEN code of practice. However, we are recruiting far too few teachers of the deaf if deaf children in the future are to get the support they need. Evidence suggests that around 80% of these teachers are over the age of 50 and, in addition, the number of training departments appears to be reducing. There is also anecdotal evidence that in some areas services are already having to rely on teaching assistants to do the job that would otherwise be done by teachers of the deaf. What steps have the Government taken to assess how many teachers need to be trained as teachers of the deaf to meet future demand and what action is being taken to ensure that they are in place? Does the Minister agree that there needs to be a national recruitment programme?
	In last week’s debate, the Children’s Minister referred to the national scholarship fund for teachers’ postgraduate training, which is available to people wishing to train as teachers of the deaf. That is a welcome first step. How many people are currently using this fund to train as teachers of the deaf? Can the Minister reassure me that this fund will be expanded to meet future needs? It is vital that we take action now to ensure that there is an adequate number of teachers of the deaf before it is too late.
	I have discussed just two of the areas where action needs to be taken to improve public services for deaf children. I strongly support the points raised by other noble Lords and hope that the Minister will do all she can to persuade the Government to take urgent action. The needs of deaf people have been sidelined for far too long.

Baroness Jolly: My Lords, this has been an excellent debate. It has been wide-ranging and based on experience and expertise, with many recurring themes. I promise that I will be positive where I can be.
	The Government recognise the scale of the issue. One in every 700 babies in England is born with some form of deafness and there are just under 10 million adults living with hearing loss. All these people will, at some point, be in contact with public services. In fact, we know that there are 35,000 children and 1.6 million adults with hearing loss being managed and supported across health and other public sector services. It is therefore absolutely vital that these public services are geared up to support their needs.
	The public sector equality duty means that public bodies must have regard to the need to eliminate discrimination and to advance equality of opportunity when making policies and delivering services. Public bodies must make reasonable adjustments for disabled people to ensure that they can use a service that is as close as reasonably possible to the standard usually offered to everyone. I would like to take your Lordships through some detail on how different areas of the public sector are addressing this very important issue.
	First, on health and social care, we know that there is a need to improve in the commissioning and integration of health and social care services for people with hearing loss, as well as in the provision of new and innovative models of care. This is why we are looking to develop a new action plan on hearing loss. The action plan will identify the key actions that will make a difference in improving health and social care outcomes for children, young people and adults with hearing loss. The Department of Health is currently engaging with a range of organisations, and aims to publish the action plan as soon as possible.
	The new health and social care structures provide the framework to improve access to services and outcomes at a local level. The national adult social care, public health and NHS outcomes frameworks enable us to hold services to account for how they are tackling health inequalities and improving health and well-being. NHS England is developing an information standard around the provision of accessible information and communication support to disabled patients, carers and service users. It is intended to be finalised in late 2014, with organisations being required to comply in 2015. Once implemented, the standard will ensure that disabled patients, service users and carers receive information from NHS bodies and providers of NHS care in formats that they can understand, and that they receive appropriate support to enable them to communicate. All this should help people when they visit their GP. Certainly, at my GP practice, a name comes up: for example, “Jolly to go to room 4”. This is not rocket science. Plenty of practices do it.
	The health service has already delivered considerable improvements in services, including reduced waits for the assessment and treatment of hearing problems in adults. Most patients on direct access audiology pathways are now treated within 18 weeks. There is greater choice of hearing aid services through independent high street providers and the new “any qualified provider”
	model, which offers even greater choice and convenience. We have rolled out a system of voluntary accreditation of hearing service providers to drive up service quality and introduced a payment-by-results tariff for hearing services, which should lead to service innovation.
	The noble Lord, Lord Hunt, asked about plans to provide NHS staff with awareness training. What I have just outlined certainly covers that; NHS England will publish guidance on making reasonable adjustments to meet the communication needs of service users. That is expected next year. All NHS staff should have disability awareness training, and within that must come British Sign Language. The noble Lord also asked about annual screenings for over-65s on hearing loss. There are no plans at the moment to introduce such screening, but everyone in that age group should be invited for an annual health check that offers the opportunity to address such problems as hearing and vision, as well as other key health issues.
	It is of course not just about assessing and treating deafness. My noble friend Lady Brinton asked what the Government are doing to develop a vaccine against cytomegalovirus. While there are currently no licensed vaccines, possible vaccinations are still being researched. She will appreciate the stringent safety checks that all new medicines and vaccines have to go through, so it will be several years before any vaccine becomes available.
	In services for children and young people, we are taking forward measures to support children with sensory impairments, including giving parents in England the opportunity to have their babies’ hearing tested shortly after birth as part of the NHS newborn hearing screening programme. There will also be a more joined-up approach to assessments, which gives clarity on responsibility across the areas of education, health and social care services and a commitment from all of them to provide their services.
	To answer the question asked by the noble Lord, Lord Hunt, new school inspection arrangements mean that inspections of schools with resourced provision or specialist units for pupils with sensory impairments are assessed by inspectors with the necessary specialist advice. We are committed to improving the training of teachers and school leaders to help them identify where pupils with hearing loss face barriers to learning and offer the appropriate support. The Department for Education is funding the development of an early support guide for parents of deaf children and giving money to support I-Sign, hosted by the National Deaf Children's Society. This should develop access to sign language for families and education professionals.
	My noble friend Lady Brinton made the point about I-Sign not being consistently employed and asked whether we should place a duty on local authorities to provide this support, as they do in some Scandinavian countries. The Children and Families Bill already places duties on local authorities to identify, assess and secure special educational provision for all children and young people with special educational needs. This could include sign language support for those who need it.
	My noble friend made a number of additional points on the issue of specialist education support services for deaf children being hit by cuts. We can confirm that we have protected the resources available
	for SEN provision, including support for deaf children. The Children and Families Bill will include a new duty on local authorities to require them, with their partners, to publish a local offer of services available to families of children with SEN and disabilities.
	On the issue of whether we need a national recruitment campaign for qualified deaf teachers, or for teachers to qualify for teaching the deaf, the National Scholarship Fund is available through the Department for Education and provides funding of up to £3,500 for teachers’ postgraduate qualifications and their training, including specialist training for teachers of the deaf. Funding of £2,000 is available to support teaching assistants and support staff to improve their skills. Indeed, 600 teachers have achieved or are working towards a qualification related to special educational needs and a further 500 have applied for the current funding round.
	To answer the point made by the noble Lord, Lord Hunt, about the attainment gap, we have ensured that funding is protected. In 2011-12, 71% of deaf children achieved five or more A to C grades in their GCSE, compared with 43% in 2007-08. Over this period, deaf pupils progressed at approximately twice the rate of their peers, closing the attainment gap significantly. This is not to say that we are complacent, but there has been progress. The Government recognise the importance of deaf people being supported and enabled to communicate through BSL where they wish to do so. Schools can offer BSL programmes to pupils with a range of vocationally related BSL and other signing
	media qualifications, from a simple awareness certificate up to more advanced levels, and there is work to develop a GCSE programme in BSL.
	However, it is not just in the areas of health, social care and education where good work is going on. Work is going on across the Government to support the needs of deaf people. We have heard from my noble friend Lady Eaton about the sort of work that has been going on in Bradford.
	We have had a few examples of where great progress is being made. Good work is being done to make services more accessible for people with hearing loss across the criminal justice system, welfare, higher education and many other parts of the public sector. I pay tribute to the work of the voluntary sector. We have heard today about organisations such as Action on Hearing Loss, Signature and the National Deaf Children’s Society, which campaign tirelessly to ensure that the needs of deaf people are not forgotten and, in many instances, work alongside the Government to help us develop our policies and ensure that those policies are put into practice.
	I hope that in the time allowed I have provided reassurance of the Government’s continued commitment. I will write to noble Lords to answer those questions that have not been covered, and I am more than happy to meet noble Lords to discuss these issues and to see whether we can progress them further.

House adjourned at 5.50 pm.